Annual Report 2016 Contents 2

1. Who we are 3. ΟΤΕ Group 5. Perfomance Review 2016 7. Sunstainability All together, all connected 03 Driving Excellence 11 Building trust, Our world, a better world 123 spreading communications 40 Group Key Financial Figures 13 Strategy 125 Group Key Operational Highlights 15 Greece 42 Pillars 126 OTE’s Performance in the Capital Markets 16 Fixed 46 Business Model 127 Mobile 57 Sustainable Development Governance 128 OTEGlobe 60 Materiality Analysis 129 OTE Estate 63 Participation in Sustainable 130 OTEAcademy 64 Development Indices OTESat-Maritel 65 Social and Environmental Indices 131 OTE Rural 66 Romania 67 Fixed 70 Mobile 74 Albania 78 Mobile 78

2. Chairman & CEO Message 4. Our Strategy 6. Corporate Governance 8. Annual Financial Report 133 The future is now 07 Making the world better Lines of principles that matter 82 through technology for all 19 Overview 84 Our Strategic Pillars 21 Shareholders 86 Technology & IT Superiority 22 Board of Directors 88 Best Customer Experience 28 Management Team 96 Innovation & Revenue Transformation 30 Control Mechanisms 110 Lead in Core Services 33 Transparency Procedures & By-laws 121 Operational & Cost Optimization 36 People Strategy 38 1 Who we are All together, all connected Who we are All together, all conected

Among the The largest largest listed telecommunications companies provider in Greece in Greece

Revenues: €4bn EBITDA: €1.3bn Leading telecom operator Market Cap: >€4bn in Southeast Europe Employees: 21,086 1. Who we are 5

OTE Group is the largest telecommunications provider in the Greek market and one of the leading telecom groups in Southeast Europe with presence in Greece, Romania and Albania. OTE is among the largest listed companies, with respect to market capitalization, in the Athens Stock Exchange.

OTE Group – Key figures (FY 2016)

Revenues Employees Adjusted EBITDA* Market Cap €4bn 21,086 €1.3bn >€4bn

Greece Romania Albania Fixed Business Fixed Business Mobile Business

Total Access Lines 2.7mn Total Access Lines 2.2mn Mobile Subscribers 1.8mn

Broadband Subscribers 1.6mn Broadband Subscribers 1.2mn

COSMOTE TV Subscribers 503k TV Subscribers 1.5mn

Mobile Business Mobile Business

Mobile Subscribers 7.7mn Mobile Subscribers 5.3mn

* The purpose and calculations of all ‘Adjusted’ data presented are detailed in the Alternative Performance Measures Section of the 2016 Annual Report of the Board of Directors: (https://www.cosmote.gr/fixed/documents/10280/188096377/REPORTENG.pdf/5db65e63-3109-422b-8c56-03ceaa705f2d) 1. Who we are 6

Shareholder Structure (Dec’ 31, 2016) OTE Group Structure

0.3% 6.6% Own Private Shares OTE SA Investors Greece

10.0% Hellenic State COSMOTE 100% 54% Telekom OTEGlobe 100% 43.1% Greece Romania Greece Institutional Investors

Shareholder Telekom 99.97% 30% OTE Εstate 100% Structure Albania Greece

70% Telekom OTESat- 94% Romania Maritel 40.0% Mobile Greece Deutsche Telekom

100% Germanos S.E. Other Europe

*Including voting rights attached to 4% of shares owned by State Pension Fund and voting rights Fixed-line Telephony Mobile Telephony Other Operations attached to 5% of shares owned by HRADF (Hellenic Republic Asset Development Fund) 2 Chairman & CEO Message The future is now 2. Chairman & CEO Message 8

My fellow Shareholders,

2016 was a good year for the OTE Group. We consolidated our position as the number-one Greek fixed and mobile communications provider, and, in terms of subscriber numbers, we became the leader in pay TV as well. These achievements reward our superior networks and our brand commitment to put the customer at the center of everything we do. We remained far and away the largest investor in telecommunications in our markets. In Greece alone, we have invested over €2 billion in the past six years and committed to another €1.5 billion by 2020, notably to establish the fiber and mobile networks that enable our customers, and our country, to succeed in the digital age. And we delivered a solid financial performance, with consolidated Group revenues of about €4 billion, a healthy EBITDA margin, and a further reduction in our net debt to its lowest level in 20 years. Reflecting these achievements, the Board has recommended a 60% increase in our dividend per share, to €0.16. The geopolitical and macroeconomic climate is volatile, and in our home market, disposable income and consumer confidence remain under pressure. In past years, we have demonstrated our ability to perform well in these difficult circumstances, and we are optimistic that we will continue to do so. This is why, once again in 2017, we have set the bar high, and given ourselves three key imperatives.

First, we believe that the future belongs to those who continue investing even when times are more challenging, and we are moving forward with our infrastructure plans. In 2017 alone, our capital expenditure programs, in the local market, should reach €500 million, one-third of our planned four- year target, to accelerate the rollout of fiber and advanced mobile networks. In total, capex this year will approximate €700 million, not including amounts we may invest in spectrum.

Second, we will continue to work hard to enhance COSMOTE’s standing as the brand most loved by consumers in Greece – and not just among telecommunications operators.

And thirdly, we aim to return to growth. If we are building the most advanced networks and the most attractive brand, it is not just to stay in place and contain revenue erosion. We want to grow our top and bottom lines, and 2017 is the year when we will put everything in place for this to start happening.

Our determination is grounded in our proven strategy. Last year, I outlined the six pillars of our strategy, and I would like to make a brief progress report on how we are executing in each of these areas. Michael Tsamaz Chairman & CEO 2. Chairman & CEO Message 9

Technology and IT Superiority Lead in Core Services

First and foremost, our technological edge comes from state-of-the-art networks providing the Our focus on new revenue streams does not detract us from reinforcing our proposition in traditional broadest coverage. In fixed, we provide high-speed VDSL access to over 2 million households and services, which remains our fourth priority and still accounts for the largest share of our revenues. businesses. In mobile, our 4G network reaches 93% of the Greek population, and 4G+ coverage is not We have now stabilized our revenues from traditional services in Greece. We view these services as a far behind, at 82%. In 2017, our flagship project is optical fiber. By December, we should have way focal point of our brand identity. The adoption of the COSMOTE brand across all our services has been over 50,000 kilometers of fiber in our core and access networks, enabling vectoring in urban and, instrumental in reinvigorating our traditional offering and in attracting younger customers. increasingly, in rural areas as well. In other words, at year end, we will be offering broadband speeds of 100Mbs to an increasing number of customers. We will also continue investing in coverage, quality and speed of our mobile networks. In fixed as well as mobile, we want a flawless navigation experience Operational and Cost Optimization to be the Number One reason customers choose us. But we also want our infrastructure to act as the backbone of the country’s economic revival – our work creates the foundation for development. While we aim to deliver best-in-class customer service relying on a top-quality infrastructure, we want to do this efficiently, and this is our fifth priority, to optimize our operations and our cost base. Building on the organizational and managerial improvements of the prior years, we will generate further Best Customer Experience savings in 2017, and we will continue leveraging the synergies coming from our membership in the Deutsche Telekom group. Offering an outstanding customer experience is our second strategic imperative, and customer satisfaction surveys indicate that we are succeeding. We will continue to improve customer care, with many innovative services scheduled for this year, and we will expand the depth and breadth of services People Strategy available in our retail networks, which already offer a unique customer experience. Our field technicians are our ambassadors in our customers’ homes. Our clients know that we care, that we are determined Finally, to make our promises a reality, we rely on our people, the sixth pillar of our strategy. In the to help them get the most value from every euro they entrust us with. digital age, our businesses require people who can blend technological savvy and interpersonal skills, and we have developed a host of programs to support these qualities At a time where many Greek graduates are seeking opportunities abroad, I want the brightest of them to view OTE as a reason to Innovation and Revenue Transformation stay. A new digital culture runs through our organization, we are encouraging job mobility and promoting a flexible work environment. We are definitely looking to the future and we want to set the standards as Our third priority is to develop new revenue streams through continuous innovation – in addition to the employer of choice in the Greek market. high-speed broadband, our main weapons in this fight are pay-TV and ICT services. Building on our strong presence in pay-TV, with already more than half a million subscribers, we intend to continue enriching our content offering, notably with our own productions. We also strengthened our leading business-to-business position with significant private and public-sector contracts. We are shooting for new revenue streams in 2017, seeking large government transformation projects, as well as work on many verticals, including health, finance, shipping and energy. 2. Chairman & CEO Message 10

Our strategy has enabled us to come a long way in the past several years, and has prepared us well for the upcoming challenges – to help our customers, and the markets where we operate, take full advantage of the new digital world in which we live and work. Digitalization is changing the way we work, learn, and enjoy ourselves, it is transforming our life and it requires constant change and constant adaptation. Our clients expect to be connected 24 hours a day, to have responses to their queries at their fingertips, they expect their devices to simplify their daily lives – and they count on us to provide this constant seamless access. The networks we have built, the content we acquire or develop, the solutions we provide, the people who join us and whom we keep at the top of their games, all guarantee that our customers will get the most out of the digital age.

We believe that telecommunications are key to the sustainable development of our economy, the enhancement of our quality of life, and the progress of society in general. Once again, in 2016, our dedication to sustainable business contributed to value creation for investors, customers, employees and the community at large. We will pursue these efforts, leveraging technology for the benefit of all. I would like to thank our Shareholders for the trust they have put in us. We will all work hard in 2017 to reward their confidence.

Michael Tsamaz Chairman & CEO 3 OTE Group Driving excellence OTE Group Driving excellence >7% increase in the Greek fixed Significant infrastructure line EBITDA and network development. record setting of Strong Free Cash Adj. Capex at €627mn 42.3% margin Flow generation at €459mn

Highly resilient The most rewarding Group EBITDA year in a long time margin at ~34% 3. OTE Group Group Key Financial Figures 13

Financial Performance (€ mn) Revenue Breakdown 2016* Adjusted EBITDA Breakdown 2016*

“The most rewarding “Highly resilient Group year in a long time” EBITDA Margin” -0.4% +0.1% -3.3% -6.4% For the first time in a decade, the group’s This is thanks to the increase of more than 7% full year topline was up due to the good in the Greek fixed line business EBITDA, resulting performance of Greek fixed line activities in a record setting of 42.3% margin quarter after quarter

4,054 2% 1% 3,918 3,903 3,908 10% Mobile 5% Mobile 6% Albania Mobile Albania Mobile Other 36.3% Romania 35.9% 34.4% 33.8% Romania 36% 7% 11% Fixed Fixed Other Greece Romania

74% 86% Greece Greece 1,456 1,422 1,343 1,321 14% Fixed 30% 50% Romania Mobile Fixed Greece Greece 27% Mobile FY 2013 FY 2014 FY 2015 FY 2016 Greece

Revenues Adjusted EBITDA Adjusted EBITDA Margin Revenue Trend Yoy % * Gross figures (excluding eliminations)

GROUP KEY GROUP KEY OTE’s PERFORMANCE FINANCIAL FIGURES OPERATIONAL HIGHLIGHTS IN THE CAPITAL MARKETS 3. OTE Group Group Key Financial Figures 14

Adjusted Free Cash Flow Evolution (€ mn) Debt & Cash Evolution (€ mn)

“Strong Free Cash “Acceleration of “Net debt was down “Securing the servicing Flow generation” infrastructure by more than €300mn of debt payments” Adj. Free Cash Flow at €459mn, despite Existing cash balances and cash flow accelerated Capex network investments” from last year’s level” secure upcoming payments Increase in Capex spending in revenue generating areas of VDSL, mobile data and TV

1.0x 0.8x 0.6x 1,220 0.4x 1,140 2,956 1,077 1,086 2,639 2,189 2,125 749 583 1,496 507 459 1,125 860 534

(471) (557) (1,461) (1,329) (570) (627) (1,514) (1,591)

FY 2013 FY 2014 FY 2015 FY 2016 FY 2013 FY 2014 FY 2015 FY 2016

Adjusted Net Operating Cash Flow Adjusted Capex Adjusted Free Cash Flow Gross Debt Cash & Other Financial Assets Adjusted Net Debt Net Debt/EBITDA

GROUP KEY GROUP KEY OTE’s PERFORMANCE FINANCIAL FIGURES OPERATIONAL HIGHLIGHTS IN THE CAPITAL MARKETS 3. OTE Group Group Key Operational Highlights 15

4G coverage COSMOTE TV at 73% in subscribers at 503k, FMC subscribers Albania increased by 13% in Romania at 370k, up 64%

Data >21% of service revenues in Mobile Greece VDSL VDSL subscribers coverage up 47% at 219k at 46% in Greece

Smartphone 58% market 4G coverage at 93% and penetration at share of Greek 57% in Greece Broadband net 4G+ at 82% additions

GROUP KEY GROUP KEY OTE’s PERFORMANCE FINANCIAL FIGURES OPERATIONAL HIGHLIGHTS IN THE CAPITAL MARKETS 3. OTE Group OTE’s Performance in the Capital Markets 16

“Market capitalization more than €4bn*” Outstanding shares: 490,150,389

*as of December 2016

OTE’s shares are traded in the: OTE’s bonds are traded in the:

• Athens Stock Exchange (ASE) • Luxemburg Stock Exchange

• London Stock Exchange (GDRs) OTE issues bonds under the Global Medium Term Note (GMTN) Program.

• Following OTE’s delisting from the New York Stock Exchange (September 2010), its American The most recently updated GMTN documentation can be viewed by clicking on the link below: Depository Shares (ADRs) trade in the OTC (Over the Counter) market with the ticker symbol HLTOY www.cosmote.gr/fixed/en/corporate/ir/lending/bonds through the Level I ADRs program

Dividend (€/share) Debt Maturity Profile–Nominal Amounts (€mn)

“Dividend 777 700 0.16 per share up 147 by 60%” 480 0.10 130 0.08 186 630 350 700 186 Feb.18 Dec.19 Jul.20

FY 2014 FY 2015 FY 2016* FY 2017 FY 2018 FY 2019 FY 2020

* Pending approval from AGM of Shareholders on June 2017 Bonds Syndicated and Bank Loans

GROUP KEY GROUP KEY OTE’s PERFORMANCE FINANCIAL FIGURES OPERATIONAL HIGHLIGHTS IN THE CAPITAL MARKETS 3. OTE Group OTE’s Performance in the Capital Markets 17

Share price

OTE Share-Price performance (€)

10 8.6 9

6 Jan.16 Feb.16 Mar.16 Apr.16 May 16 Jun.16 Jul.16 Aug.16 Sep.16 Oct.16 Nov.16 Dec.16 Jan.17 Feb.17 Mar.17

OTE - Share Price Performance vs ASE and Eurotelcos Index

10 103.5

9 93.5

8 84.9

6 Jan.16 Feb.16 Mar.16 Apr.16 May 16 Jun.16 Jul.16 Aug.16 Sep.16 Oct.16 Nov.16 Dec.16 Jan.17 Feb.17 Mar.17

OTE ASE Index Eurotelcos

GROUP KEY GROUP KEY OTE’s PERFORMANCE FINANCIAL FIGURES OPERATIONAL HIGHLIGHTS IN THE CAPITAL MARKETS 3. OTE Group OTE’s Performance in the Capital Markets 18

OTE PLC Bonds Overview

2018 OTE Bond: Yield to Maturity 2019 OTE Bond: Yield to Maturity 2020 OTE Bond: Yield to Maturity

8 7 6 5 4 3.0 3.2 3 1.9 2 1 0 ov.16 ov.16 ov.16 Jul.16 Jul.16 Jul.16 Apr.16 Apr.16 Apr.16 Jan.17 Jan.17 Oct.16 Oct.16 Jan.16 Jan.16 Feb.17 Feb.17 Jun.16 Jun.16 Jan.17 Feb.16 Feb.16 Oct.16 Jan.16 Feb.17 Jun.16 Mar.17 Mar.17 Feb.16 Sep.16 Sep.16 Mar.16 Mar.16 Mar.17 N N Dec.16 Dec.16 Sep.16 Mar.16 N Aug.16 Aug.16 Dec.16 Aug.16 May 16 May 16 May 16

Maturity Feb 2018 Maturity Dec 2019 Maturity July 2020 Outstanding Amount €630mn Outstanding Amount €350mn Outstanding Amount €700mn Coupon 7.875% (paid semi-annually) Coupon 4.375% Coupon 3.5% ISIN XS0885718782 ISIN XS1327539976 ISIN XS1086785182

OTE’s Rating

Standard Moody’s & Poor’s B+ Caa2+

GROUP KEY GROUP KEY OTE’s PERFORMANCE FINANCIAL FIGURES OPERATIONAL HIGHLIGHTS IN THE CAPITAL MARKETS 4 Our Strategy Making the world better through technology for all Our Strategy Making the world better Offering the through technology for all best customer experience and being the first choice for the customer Maintaining leadership People in our core services development lies at the heart of OTE Group’s actions

Focusing on new services with Improving systems growth potential Continuing and processes development and reducing our of network and cost base in order infrastructure to achieve more efficient operation 4. Our Strategy Our Strategic Pillars 21

As part of its transformation into a high performance company, OTE is focused, through its strategic plan, on remaining a financially robust company and reinforcing its operational performance through digital transformation in order to be able to continuously offer best-in-class services and a unique customer experience, based on its technologically advanced telecommunications network.

Key Industry Trends Crafting the Focus of Strategy

Invest Promote Drive Increase Wisely Digitalization Innovation Loyalty

Growing demand for Digital Economy Slowdown of traditional High competition – converged networks creates opportunities revenue streams Increased demand for with increased and mandates Digital bundled offerings data capacity Transformation

The Six Pillars of our Strategic Plan

Technology Best Customer Innovation Lead & IT Superiority Experience & Revenue Transformation in Core Services

Operational & Cost Optimization

People Strategy

OUR STRATEGIC TECHNOLOGY BEST CUSTOMER Innovation & Revenue LEAD IN OPERATIONAL People PILLARS & IT SUPERIORITY EXPERIENCE Transformation CORE SERVICES & COST OPTIMIZATION Strategy 4. Our Strategy TechnologY AND IT Superiority 22

Further expansion of Next Generation Networks with VDSL and LTE (4G/4G+) gradually covering all of Greece.

LTE: (4G/4G+) Fixed & Mobile Single Radio IP VDSL: (FTTC) Technological 4G+ with speeds of Access Network Transformation Synergies up to 375 Mbps at project (SRAN) ~82% coverage

“OTE continues to develop its networks and infrastructure”

VDSL Coverage IP Transformation

VDSL (FFTC) IP Transformation

OTE has been developing a next generation access (NGA) network by: OTE is deploying VoIP infrastructure in Greece, aiming at: • Placing Fiber Optic cable to the access network close to the • Network simplification & modernization 77% subscriber (Fiber-To-The-Cabinet) • Operating cost reduction 100% • Installing MSAN/VDSL2/vectoring equipment (both at local • Improved customer experience exchanges and at Cabinets). Vectoring technology allow to offer • Introduction of new IP based services broadband services at 100 Mbps, over the copper access network ~50% 23% in existing and new FTTC installations 46% In 2016, OTE accelerated VoIP migration by using both VoBB and 2016 2019 • Aggregate MSAN/VDSL2/vectoring equipment with BNG VDSL 25% VoPOTSoMSAN solutions. IP TDM technology offers broadband speeds of up to 50Mbps, more than double compared to ADSL (up to 24Mbps). From 2017 using VDSL 2016 2019 vectoring technology, OTE will offer speeds up to 100Mbps VDSL VDSL / Vectoring Fixed & Mobile Technological Synergies

Work towards Fixed & Mobile network consolidation, aiming at: • Common IP Core Infrastructure /Common IN and VM Infrastructure • Common Services Management Environment • Maximizing Backhauling (over F/O or wireless) and Transport Synergies • Maximizing Power and Civil Infrastructure Synergies

LTE Coverage In 2016 OTE offered commercial Hybrid access (fixed-mobile) products in order to reach speeds of up to 50 Mbps (to non-VDSL areas) or up to 100 Mbps (to VDSL areas). LTE (4G/4G+) Single Radio Access Network Project (SRAN) COSMOTE further developed its LTE network in Greece: • It has secured spectrum at 800MHz and 2,600MHz until 2030 • Transforming the mobile network to establish a common 2G/3G/4G infrastructure per base station location to facilitate its LTE expansion plans in terms of coverage (indoor 93% 98% • Modernizing the RAN equipment (BTS/Node-B & BSC/RNC) and the antenna system, as well as &outdoor) and capacity transforming the data transmission networks into IP networks • 4G/LTE network covers 93% of population, while 4G+/ LTE- • SRAN’s main benefits involve cost reduction due to the economies of scale in equipment prices, Advanced network covers ~82% of population, comprising a reduced energy consumption, lower volume/size in infrastructure per location, as well as less strong competitive advantage 2016 2019 maintenance requirements

“Next generation fixed access network”

VDSL services provided from the Street Cabinet (FTTC)

OTE IP Network

CO Aggregation Street Cabinet switch -BNG midi DSLAM

OLO IP network

PSTN migration project scope & related benefit

Project Scope

• Offer Voice Services through the IP network • Retirement of legacy PSTN/ISDN Systems

Benefits Customer Router / IAD CO Aggregation IMS Premises switch -BNG Ethernet IP Core • Energy consumption efficiency • Old PSTN Network Dismantling • New Service Availability • Maximization of NGA Network Usage

Voice over BB (for Double Play and ISDN BRA Customers)

Customer CO Aggregation Ethernet IP Core IMS Premises switch -BNG

Voice over MSAN POTS ports (for Single Play and remaining Double Play Customers)

TV Services Highlights of 2016 OTE’s Special Networks

• Launch of Hybrid-IP service Radio-maritime services and Networks: • Launch of COSMOTE TV Go additional OTT clients (PC and MAC OS X) • Enrichment of Video On Demand Services portfolio by introducing COSMOTE TV Plus catalogue • OTE continued the implementation of a 2-year contract awarded by the Hellenic Coast Guard for the (available for STB and OTT devices) nationwide provision of Safety of Life at Sea communications (GMDSS), using OTE’s Olympia Radio • Enhancement of TV services with innovative add-on services like Remote PVR network. In 2016, Olympia Radio network handled 46 Mayday signals, 165 emergency signals, 461 • Modernization and Expansion of Cisco/NDS CAS platform to support 1M satellite customers gale reports and 16,414 NAVTEX signals • Rebranding of OTE TV to COSMOTE TV • Most importantly, we co-operated with Hellenic Coast Guard in 149 cases of Safety of Life at Sea • Gradual migration of existing Satellite customers to Hybrid TV platform incidents involving 1,889 lives • Full retirement of legacy IPTV platform • Expansion of OTT HeadEnd to support more SD/HD channels Satellite capacity and services: • Implementation of georedundancy site for DTH Head-End Platform • Implementation of a Media Asset Management (MAM) system for COSMOTE Cinema Channels • Expansion of satellite network infrastructure, addressing business customers’ requests for capacity • Implementation of a full LAB system for DTH & IPTV platforms expansion and new services at our two Satellite Teleports, Nemea and Thermopylae. • Transfer of COSMOTE TV services from satellite EUTELSAT 9A to EUTELSAT 9B • Inmarsat-OTE co-operation in Nemea towards the successful launch of the European Aviation Network (EAN), the world’s first integrated satellite and air-to-ground network dedicated to providing a true in-flight broadband experience for Europe’s aviation industry • Network upgrade and redundancy schemes implementation, aiming at improved availability figures Improvement of provisioning services and fault repair and customer experience. procedures, having a positive impact on end to end KPIs

Network quality indices for Voice-Internet-IPTV 21.5% 21.4%

69.2% 7. 2% 18.4% 6.3% 5.3% 47.7% 46.0%

FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016

Repeated Fault Rate %* % of new services reported with fault ** Fault repair time (Fault Clearing Time) 80% in hours*** * Repeated within 30 days **Within 10 days of provision *** For 80% of the worst fault

Transport Network Evolution in 2016 Technology Innovation

Expansion of MPLS-TP in fixed transport network in order to support current and future needs towards The coverage and capacity expansion of COSMOTE’s 4G/4G+ network will continue, aiming at All-IP Transformation and Broadband expansion. maintaining its technological superiority through the adoption of new technologies (i.e. MIMO 4x4) and the full exploitation of COSMOTE’s allocated spectrum.

Legacy Retirement in 2016 Single Radio Access Network (SRAN) Project Replacement of ATM DSLAMs by ETH DSLAMs for network modernization, simplification, energy saving and service enhancement. The replacement project will be nearly completed within 2018. Decommission • In 2016, a significant number of sites were swapped (~86%), thus covering a large percentage of of Legacy SDH continued and will be completed until 2020, following the decommission of ATM and the mobile telecommunications access network infrastructure PSTN network. • The Single RAN project will be completed in 2017. At the end of the Single RAN project, almost all sites will support HSPA 42/5.8 Mbps: 4G/4G+ Technology

In 2016, COSMOTE achieved many technological milestones: • It was one of the first networks worldwide and the 1st in Greece that commercially launched LTE ~70 % >60% ~6% Advanced Pro technology (December 2016), giving speeds of up to 500Mbps through LTE Advanced of sites will support will support will support – 3xCarrier Aggregation (3CA) & 256 Quadrature Amplitude Modulation (256QAM). The rollout of LTE 1800MHz LTE 800MHz LTE 2600MHz COSMOTE’s 4G & 4G+ LTE Advanced network is ongoing throughout the entire country

• During 2016, the established 4G/4G+ base stations increased and the respective 4G population coverage rose from 81% to 93%, while the 4G+ population coverage rose from ~55% to ~82%

• COSMOTE’s network leadership through the P3 Communications Mobile Benchmarking research took place on July 2016. COSMOTE was awarded the “Best in Test” Certificate for its Voice & Data services

Digital One Transformation Brand

The Customer is placed at the heart of the way we think and act

#1 in Brand Contact & Customer Centers & E2E satisfaction processes "Offering a unique customer surveys experience and being the first choice for integrated telecommunications services"

One Brand Digital Transformation

Established in the minds of the customers a new consolidated brand COSMOTE, increasing the Driving e-bill and e-service penetration to both fixed and mobile segments: “footprint” of the basic values of the brand, such as “dynamic”, “trustworthy“ “stands out in quality and • e-bill uptake to >950K customers (23% of total bills) services”, “best networks and infrastructure”, “worth money paying“, regarding both Fixed and Mobile. • Steady growth of Mobile Application usage (+50% yoy), 35% of our smartphone users • Increased e-channel contribution on sales at 10% • More than 3.5% of prepaid revenues derive from e-top ups Contact Centers & E2E Processes Initiated new, automated, digital functionalities which strengthened the Customer Experience and • COSMOTE ONE established dedicated experts for Mobile, Fixed and COSMOTE TV company’s competitive advantage such as: • Enhanced self services in IVR menus & smart routing capabilities at the call centers providing • e-Signature customers with quick access to the most suitable, dedicated agent (2million IVR customers in 2016) • Paperless contract implementation • New digital services in customer service further enhanced customized customer experiences and • Automated, real time fault repair personalized service delivery: Video Call capabilities, Hints & Tips videos, On the spot visualization • Proactive communication with customer of the customers’ problem through the use of mobile camera • Ongoing core end2end process improvements aiming to further enhance customer experience. 74% of technical issues are being resolved at 1st contact. COSMOTE TV Faults Resolution Rate reached Walk-in traffic in our retail stores / customer service 95%. Order management process was further automated reaching a 50% automation rate in fixed contacts and mobile contracts • B2B dedicated VIP customer / dedicated personalized support through number 13820 & dedicated • Completed refurbishment of 100 Germanos stores providing unique experience and access to even experts more technology products • Customized support for FMCC customers • Our retail network consists of: • Proactive B2B customers information for network maintenance & failures ---- 306 Germanos-branded stores and • ICT highly specialized consultants provide unique, personalized customer services ---- 135 COSMOTE-branded stores • Customer Service, Fixed and Mobile, handled more than 60 milion contacts. • Almost 610,000 hours of training and coaching for the company (more than 230,000 hours to the #1 in Brand & Customer Satisfaction Surveys frontline Shops employees) were allocated to further support corporate strategy and ensure best customer experience Regular brand and customer satisfaction surveys indicate that the company continues reaping the • Increased contribution of telesales channels in the implementation of commercial corporate fruits of its leadership across the fixed and mobile markets in terms of: strategy: more than 1.8 milion products and services were sold via telesales • being a trusted, reliable and preferred brand • The company’s Telemarketing team won the 1st place in the “Best Telesales Team of the Year” • providing network superiority category (gaining 6 prizes in total)

“Focusing on new services with growth potential”

Higher Broadband Speeds ICT, M2M/ IOT CLOUD

Mobile Data Pay-TV

Innovation and Partnerships

Mobile Data Pay-TV Strong data organic revenue growth +9% with revenue contribution on Service Revenues reaching 21.4% driven by: • Enrichment of TV exclusive and premium content led strong performance in terms of revenues and customer base • 4G/4G+ coverage and speed leadership • Initiated Unique Hybrid services (COSMOTE Replay TV - COSMOTE Cinema on Demand • 4G handset penetration on active base reached 29% from 14% last year & COSMOTE TV Plus – PVR-COSMOTE TV GO) • Smartphones take-up at 57% of active base from 52% • Pay-TV revenues increased by 31% yoy despite the new 10% Pay-TV revenue tax applied • Average active internet users take-up at 40% of active base from 35% last year as of June 1, 2016, which significantly slowed-down the Pay-TV base uptake • Data traffic dynamic growth (+51% yoy) • Customers closing base growing at 503K (+13% yoy).

COSMOTE My Internet service, is offering to all COSMOTE mobile customers real-time notification, upon consumption of the available MBs, and the major benefit of the “service cut-off policy” that ensures that Higher Broadband Speeds no extra charges are imposed to the customer. New short-period data bundles called “Giga Deals” that offer a lot of GBs at a competitive price, for daily or weekend duration (e.g. Weekend, 5 GB for 2.90€). • Capitalize on extended NGA footprint as well as speed enhancement campaigns, resulting VDSL base growing to 13.4% of Broadband customers from approximately 10% in 2015, or 219k customers. Consumer Broadband revenues increased by +11.4% yoy and Business by 4.4% driven Innovation and Partnerships by investments in VDSL and by proactive speed development campaigns pushing broadband penetration on access and VDSL penetration on broadband • Successfully launched COSMOTE@Your Service, a new, innovative service with integrated • Broadband base up by 129K reaching 1.6 mn, capturing 58% broadband net additions share technological solutions vs. 55% in 2015, expanding our overall Broadband share by 1 percentage point • Became the first company in Greece and among the first in Europe to introduce the Narrow-Band • OTE broadband -penetration on access- increased by 6 percentage points from 56% in 2015 Internet of Things in cooperation with Deutsche Telekom and Huawei & the IPv6 mobile network to 62% in 2016. services protocol for M2M and IoT services. • Increased VDSL base by 70k, compared to 2015, reaching 219k VDSL base • Install & support Smart City pilot systems (Smart Parking and Smart Lighting) • Introduce Tourismart, an innovative IoT application, which allows for the use of hotel services via Smartphone, during the guests’ stay • Partner of Greek Tourism Confederation (SETE) • Environmental Awards 2016 for COSMOTE Energy Management service for Municipality of Patras & Agiou Dimitriou • Smart cities pilot projects: Chalkida (2016), Patra (2017) • Business IT Excellence Award for IT securuty projects. Top IT Security Projects: Piraeus Bank, Fraport, Viochalko, Bank of Greece • Eurobank Video Conference & Banking Services

ICT, M2M / IoT, CLOUD

• Through our intense activity in the field of IT Integration and having established strategic partnerships to implement complex ICT projects, the company strengthened its leading position in ICT and remains a partner of choice for businesses seeking advanced solutions in the fields of health, tourism, information security, energy, Data Centers, Cloud and Internet of Things (IoT) • In 2016 OTE Group received the WITSA Global ICT Excellence Awards 2016 for its work on the Data Center of Coca-Cola HBC Group in Greece • New cloud-based applications and services were added to the integrated technological COSMOTE Business IT Solutions, thus responding to the daily needs all businesses have, enabling them to become more efficient and competitive • Launch of new cloud based service Office 365 • Launch of new web hosting packages/ rate plans • Launch of COSMOTE POS service which provides businesses & freelancers the option to accept payments via credit, debit and prepaid cards • Launch of the Mobile Device Management (MDM) service, which offers remote management of Smartphones & Tablets and secure access on corporate emails & files

Top Projects won/delivered in 2016:

• Completion & Operation of Coca-Cola HBC Group’s Data Center for 28 countries • Big Data Shared Service Center • Fire Brigade Operations Center • Upgrade of 2,500 OPAP shops and central points • National Telemedicine Network • Med Sea Health S.A.’s Miraggio Thermal Spa Resort

Fixed Leadership Mobile Leadership FMC Focus

Optimize Sales Channel Strategy

B2B Leadership

Defend Wholesale “Maintaining leadership Revenues in fixed and mobile”

Mobile Leadership B2B Leadership

COSMOTE retained its leadership in Service Revenues share >50% focusing mainly on defending Safeguarded core B2B revenues via customer base & ARPU dilution control customer base and growing value from the base. Market Service Revenues contraction slowed down by 2.2 p.p. (-1.5% in FY’16 vs. 3.7% in FY’15) despite growing pressure on disposable income. Leveraging on its customer centric strategy, the company managed to maintain its strong revenue leadership position. FMC Focus

• Focusing on integrated FMC customers’ needs, the company promoted even more COSMOTE 1 and Fixed Leadership COSMOTE Business 1 products for Mobile and Fixed targeting ARPU protection along with offering innovative services to the costumers Despite intense competitive pressures and a challenging macro-environment, OTE has managed to maintain its access line share stable at 56%, with approximately 2.7 million retail lines, leveraging its • For B2C, COSMOTE ONE was launched addressing household communication and entertainment customer-centric strategy and its converged fixed and mobile value propositions. Access base stabilized needs, enabling both single and family households to experience and share more, wherever they are as a result of record low line losses for FY’16 (-26k vs -42k in FY‘15). • For B2B, FMCC services for small businesses were launched:

Optimize Sales Channel Strategy ––– COSMOTE Business One - Smart Office/Digital Office, Internet Presence,-Cloud storage/email. Already 30k SME/VSE exploit the benefits of those services (22% penetration) Further optimized channel performance and sales productivity focusing on Value-Based sales steering capabilities and return on market investment. ––– The “Next Business Generation” program was another COSMOTE initiative to foster entrepreneurship in Greece. Three (3) Greek family businesses stood out in the program and earn substantial advertising promotion and COSMOTE Business One services for free Defend Wholesale Revenues

• OTEGlobe won 2 “Global Carrier Awards 2016”: “Best Eastern European Wholesale Carrier” and “Best Customer Testimony”

• OTEGlobe is a founding member of the constructing consortium for international super-high-speed subsea cable Asia-Africa-Europe-1 (AAE-1), the largest to be constructed in almost 15 years

• Achieved Wholesale Access services growth and Data services capacity base conservation

COSMOTE One Roaming

COSMOTE One, an entire new world of communication and entertainment benefits for the subscribers, • Re-launched the free of charge Roaming Data Limit service in order to offer worry-free data usage allows them to enjoy Internet, Voice, and Entertainment Services anytime, from any device, wherever abroad with even greater cost control, allowing subscribers to set maximum data usage limits they are. With COSMOTE One, subscribers benefit from free communication between mobile and fixed worldwide, according to their needs line, as well as other unique advantages, such as free Cloud Storage service of 15GB, the OTE TV Go service allowing them to watch OTE TV from their Smartphone or Tablet both within and outside their • COSMOTE Travel & Talk roaming service for COSMOTE prepaid, Mobile Cost Control and Business house, in a single envelope including both their fixed and mobile bills and finally the new improved Mobile Cost Control subscribers which offers daily and weekly voice (outgoing & incoming calls) experience of personalized Customer Care service. and SMS bundles in more than 60 countries at the very low price caps. COSMOTE subscribers talk and send SMS at very low rates and with total cost control

Cosmote Business one • COSMOTE subscribers of COSMOTE Mobile & COSMOTE Business Mobile tariff plans enjoy roaming with no additional cost, forever, within the European Union as well as in Iceland, Lichtenstein and Norway. Subscribers of the aforementioned tariff plans who have activated the COSMOTE Travel COSMOTE Business One, meets the enterprise needs, providing everything for better organization, Pass service and travel to these countries, are able to use their available air time, SMS and MBs efficiently function and even bigger growth. «COSMOTE Business One» offers, free mobile and fix calls for web browsing from their mobile, as well as receive incoming calls with no additional charges. between company’s numbers, manages incoming calls with call center services such as a welcome Furthermore, for subscribers –both residential and business– who have not subscribed to any of message and programming aberrations depending on operating hours. Simultaneously can store the above tariff plans, COSMOTE reduced the daily charge of the COSMOTE Travel Pass service for files in the 80GB free storage - available everywhere and at any time, sending and receive fax in the the aforementioned countries to €2.99/day, from €4.99/day. Additionally, customers enjoying the mail. The entire above in a common envelope, with a personalized service for even better customer COSMOTE 4G network in Greece, can also surf the web at incredible 4G speeds while roaming, in experience. cooperation with most providers in Europe Launch «COSMOTE Business Mobile Cost Control Value» & «COSMOTE Business Mobile Cost Control for All”, two new Mobile Cost Control rate plan series. Main targets of new series are: the enhancement of product value with addition of embedded minutes & MBs, increasing the Data penetration & Data usage, enriching the available range of COSMOTE Business One programs.

Launch of COSMOTE Mobile Backup service which provides back up internet connection through 3G/4G in case of ADSL/VDSL internet connection technical issues.

“Improving systems and proccesses and reducing our cost base in order to achieve more efficient operation”

Operations Optimization

Digital Cost Transformation Efficiencies at the Company

Digital Transformation at the Company Cost Efficiencies

• Further unification, simplification and automation of Journeys at the company: E-Signature; Single • Significant reduction of debt financing costs Sign On • Energy program to reduce cost led to establishment of Energy Unit with OTE Estate • Digitization of Finance: one.ERP; Launched Credit Control Tool at Fixed; Common F-M “One” Revenue Assurance platform; New Expense Policy digital workflow; PO process automations • Monetization of unused real estate

• Digital Transformation Program detailed & recognized as the Design Principle at DT Europe • Procurement synergies with DT Group in Technology, IT, licenses, terminals, exceeding savings’ target

• Cost efficiency programs Operations Optimization

• Improved DSO, despite the adverse economic environment

• Further streamlining of “Order2Bill” and “Fault2Repair” processes through a 48/24 program with substantial results in customer satisfaction

• Customer Care new common operating model initiatives

• Further Digitization & automation of Call Centers processes resulting in improved customer experience

• Enhanced Digital experience at Retail stores

• Subcontractors Consolidation and management automation

• Enhancements on physical and information security and on Business Continuity processes

• Physical security hardening of buildings & shops

“People development lies at the heart of OTE Group’s actions”

Towards this end, OTE and COSMOTE implement a wide-ranging training and skills development program as well as contemporary leadership programs for all levels of management, while also Cost investing in talent promotion programs. Rationalization Aiming to support employee career development, the two companies are planning a new, integrated Job Family Model describing employee positions and roles.

In order to optimize employee experience, human resources procedures are simplified, standardized Organizational and merged, through projects leading to the new digital age. transformation and efficiency

Making health and safety a priority in Training the workplace and skills development ATTRACT AND RETAIN TALENTS

LEADERSHIP CULTURE

Training and SkillS Development Cost Rationalization

• Implementing upskilling and reskilling programs • Implementing voluntary retirement plans in a socially responsible manner • Planning and implementing training sessions according to business needs • Over 230 targeted hirings throughout Greece • Implementing programs that aim to encourage creative thinking and innovation • Over 480 vocational school and university students carried out internships at OTE and COSMOTE • Promoting international career opportunities within the DT Group

Making Health and Safety a Priority in the Workplace LEADERSHIP CULTURE • Strengthening the values of a Health and Safety culture • Updating leadership programs in accordance with increasing demands and changing management • Focusing on a single regulatory framework, OTE and COSMOTE, with common procedures, work conditions (“You.Lead” programs) instructions and publications • Implementing leadership programs for new managers • IT organization and monitoring of the program for occupational physicians towards reinforcing prevention • Implementing new leadership skills development programs aimed at experienced frontline executives • Informative and consultative actions towards balancing the personal and professional lives of employees (“Living Better” programs)

ATTRACT AND RETAIN TALENTS Average Training Hours in 2016 OTE Employee Average Age • Completion of the “developmental journey” of the ten young people selected for the “COSMOTE Approximately 6,500 employees Graduate Trainee Program” which attracted talent from the market participated in trainings 45.1 • Continuation of the specially designed “developmental course” for the nine employees selected by the 44.2 “you.grow” internal talent program 42.5 42.9

Organizational Transformation and Efficiency FY 2013 FY 2014 FY 2015 FY 2016 COSMOTE OTE • Streamlining and harmonizing policies, procedures and systems 12.8 17.0 COSMOTE Employee Average Age • Continuing the functional integration of fixed and mobile telephony, and the support of new, contemporary organizational structures • Planning and implementing a new, integrated model describing the position and role of all employees 41.4 • Simplifying, standardizing and merging procedures towards a new, contemporary HR operating model 40.5 39.6 Training hours per employee 38.6 have been calculated based on the average headcount FY 2013 FY 2014 FY 2015 FY 2016

Best EBITDA margin ever in Greek Data >21% Fixed, at 42.3% of service revenues COSMOTE TV in Mobile Greece subscribers at 503k, increased by 13%

4G coverage at 93% and VDSL subscribers 4G+ at 82% up 47% at 219k in Greece 5. Performance Review 2016 Greece 42

Greek business overview / highlights Greek Market

Market structure Significant growth potential in Broadband, TV and mobile data OTE is the clear Leader in a very competitive market: • Greek broadband market growth at +7% vs 2015, still lagging behind EU broadband penetration • Pay-TV segment marginally higher +2% vs 2015

Reinforced leading position in the Greek market

• Reduction in losses of Fixed Access connection • Increased market share in Broadband net additions 77% • Sustained leading position in Mobile Telephony. 72% 66% 60%

24% 24% 22% Greece: ~74% of Group revenues 18% 20% 21% • Leader in Fixed Business 14% 16%

• Leader in Mobile Telephony FY 2013 FY 2014 FY 2015 FY 2016

Broadband / Total Fixed Lines (%) TV Penetration % COSMOTE Mobile Data Revenues as % of Serice Revenues

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Regulatory developments

Key recent developments in the EU regulatory framework • Roaming: a phased introduction of “roam like home” retail charges for intra-EU roaming calls and data, so that, from June 2017, operators will not charge more for EU roaming than for national OTE’s fixed and mobile businesses are directly affected by European telecoms regulation. calls. While EU wholesale and retail roaming charges have already been reduced substantially since the first roaming regulation in 2007, the new TSM regulation is expected to further cut roaming Based on the provisions of Telecom Single Market Regulation, BEREC (the Body of European Regulators charges and revenues. for Electronic Communications) on August 30, 2016, issued guidelines for the implementation of the relevant provisions by NRAs in order to contribute to the consistent application of this Regulation. • The General Data Protection Regulation (GDPR) 2016/679, published in May 2016, updates the EU The guidelines cover issues inter alia for assessing zero-rating commercial practices and “specialized data protection rules for “the digital age” and shall apply from May 2018. GDPR strengthens online services” and for reaching consistent decisions and monitoring actions. privacy rights as well as the obligations of data controllers and imposes very high fines in case of infringement of its provisions. More specifically, as regards net neutrality, fixed and mobile operators will not be able to discriminate between different types of data traffic on their networks or block services and applications. Operators • “ePrivacy” Directive 2002/58 for electronic communications, being specific law complementary to can still offer specific types of specialized services and, subject to conditions, allow some traffic not to GDPR, came under review as part of the Digital Market Strategy, with a view to be updated through count against a subscriber’s data bundle (“zero-rating”). a legislative proposal, which has been presented on January 2017.

EU roaming maximum tariffs regulation

The maximum tariffs (excluding VAT) for calls, texts and downloading data are 1 July 2014 30 April 2016 15 June 2017

Outgoing voice calls (per minute) €0.19 domestic price + up to €0.05 no extra roaming fee, same as domestic price

Incoming voice calls (per minute) €0.05 €0.014 no extra roaming fee, same as domestic price

Outgoing texts (per SMS message) €0.06 domestic price + up to €0.02 no extra roaming fee, same as domestic price

Online (data download, per MB*) €0.20 domestic price + up to €0.05 no extra roaming fee, same as domestic price

*The tariff is per Megabyte to download data or browse the Internet while travelling abroad (charged per Kilobyte used). These price caps are the maximum permissible prices. Operators are free to offer cheaper rates. Member States’ national telecoms regulators must ensure that mobile phone operators comply with the new rules on data roaming and the lower prices of voice calls. Consumers can contact the national regulator in the Member State where their mobile operator is based if they have any problems or questions about the new limits.

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The EU framework review

The current telecoms rules are under review, via the so-called “connectivity package” launched on September 2016, including the proposal for a new European Electronic Communications Code. The review is taking place within the context of the Digital Single Market (DSM) strategy for Europe. Currently, the proposal has entered the EU legislative process which is estimated to be concluded by the end of 2017. OTE believes that the review must focus on :

• creating a more investment - friendly climate in Europe, so that telecoms operators have incentives to invest in both fixed and mobile high-speed networks. Only this way can Europe close the “digital gap” with its major global competitors

• achieving a major reduction in burdensome regulation of the telecoms sector. Regulation must be simpler, less costly and limited to genuine bottlenecks in competitive European markets

• leveling the playing field between telcos and “Over-The-Top” players such as Google, Amazon and Facebook. While the telecoms sector remains heavily regulated, OTT players, though often offering very similar services to telcos, can freely operate across Europe with limited regulation MTRs Gilde Path (eurocent/min) • ensuring the “same service same rule” principle. A technologically neutral approach is important as it would facilitate the clearance of content rights, thus providing greater safety for companies, as well as consistent protection standards to consumers of audio-visual content 10.07

7.86 6.24 4.95 4.95 3.6 2.3 1.27 1.19 1.10 1.08

Dec.08 Jan.09 Jan.10 Jan.11 Jan.12 Aug.12 Oct.12 Jan.13 Jan.14 Jan.15 Jan.16

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Key regulatory issues facing the fixed and mobile sectors in Greece

In June 2016, Pr. Dimitris Tsamakis was named Chairman of the Hellenic Telecommunications and Posts • Vectoring: In December 2016, EETT published the Decision on the introduction of vectoring Commission (EETT), resuming a post which had been vacant since January 2015. Since then, EETT has technology for next generation access networks. OTE submitted an investment plan in accordance been trying to gain ground, publishing pending Decisions and resolving outstanding regulatory issues. to the NRA’s Decision Key outstanding issues include: • Retail Fixed Access: In December 2016, EETT published a Decision for deregulating retail • Fixed-Mobile Convergence: Following the rebranding of COSMOTE FMC offer as “COSMOTE One” access market. However, OTE’s obligations for price control of its retail offers have been retained and the subsequent formal complaints of all fixed and mobile competitors against the offer, EETT as remedies to wholesale markets (i.e. wholesale local access provided at a fixed location held a new hearing on January 2016 for the examination of alleged violations of law on electronic and wholesale central access provided at a fixed location for mass-market products) communications and on free competition. The decision is still pending. • Universal Service: In September 2016 the Tender for the provision of universal service provider/s In October 2016 OTE and COSMOTE received a Request for Information by EETT addressed to “OTE was concluded. OTE is the designated provider for service directory services and for public phones Group” within the framework of an investigation for abuse of dominance by OTE and COSMOTE through the offering of bundled mobile and fixed products. EETT requested information regarding The provision of the universal service as indicated above starts on the evolution of subscribers from January 2014 up to June 2016 for all products bundling retail January 1st, 2017 and will last for a period of three (3) years fixed access with mobile and/or TV services. OTE and COSMOTE provided the requested data on 19.12.2016. • Spectrum: in 2017, EETT is expected to carry out an auction for the 1800MHz spectrum currently held by Vodafone and WIND for which the licenses expire in February 2018. The 2x25MHz of1800MHz spectrum held by COSMOTE, for which the license expires in 2020, may also be covered by this auction

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FIXED OVERVIEW “Further profitability gains in fixed

OTE is the leading operator in Greek fixed-line market with approximately 2.7 million retail fixed access despite challenging environment” lines and a market share of 56%. In a steady market in terms of value, OTE managed to increase revenues by 2.1%:

• Reducing access lines loss to 26k vs 42k in 2015 and 126k in 2014

• Increasing broadband customers by 9% vs 2015, reaching 1.6m customers while gaining 129k net additions (market share in net adds at 58%). Thus, OTE’s market share in broadband lines increased to 44.9% vs 44.1% in 2015.

Fixed-Line Access Line Evolution Fixed-Line Net Additions (000) (000) 3-Year CAGR: -0.3% 100 100

4,796 4,770 4.740 4,749 35 12 40.5% 42.8% 43.4% 44.0% 8 (26) (30) (110) (126) (42) (26) 59.5% 57. 2% 56.6% 56.0% (210)

FY 2013 FY 2014 FY 2015 FY 2016 FY 2013 FY 2014 FY 2015 FY 2016

Competitors’ Lines Market Shares OTE Retail Lines Market Shares Competitors’ Lines Net Additions OTE Retail Lines Net Additions (disconnections) Total Fixed Market Line Net Additions (Disconnections)

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Broadband Market Evolution Broadband Net Additions (000) (000)

Performance benefited from:

• Οngoing investments in high-speed networks and new solutions, • Ιmprovements in customer experience, and • The steady rollout of commercial initiatives aimed at attracting new subscribers

55.4% 57.7% 37.0 % 38.3%

3-Year CAGR: +8.0% 276 252 2,889 3,166 3,417 3,641 223 171 223 112 56.3% 56.8% 55.9% 55.1% 140 95

43.7% 43.2% 44.1% 44.9% 82 106 140 129

FY 2013 FY 2014 FY 2015 FY 2016 FY 2013 FY 2014 FY 2015 FY 2016

ΟΤΕ Retail Broadband Competitors Broadband Competitors’ (LLU &Wholesale ADSL/VDSL Net Adds OTE Retail Broadband Customer Net Adds Greek Broadband Market Net Additions OTE Broadband Net Additions Market Share

FIXED MOBILE OTEGLOBE OTE ESTATE OTEACADEMY OTESAT-MARITEL OTE RURAL 5. Performance Review 2016 Greece Fixed 48 vdsl expansion Leader in VDSL take up OTE is currently the only telecom operator in Greece that is developing an NGA network with FTTC (Fiber To The Cabinet). Throughout the year OTE further expanded its VDSL network, reaching a total of about 6,200 commercially active cabinets, offering an amazing customer experience with speeds of up to 50Mbps to approx. 46% of the market.

• The high-speed VDSL offering has already been adopted by 219k retail customers, or 13,4% of OTE’s broadband base

• With continuously expanding coverage and high-performance solutions, OTE is aiming to convert a significant and growing portion of its customer base to higher broadband speeds and improved services, supporting ARPU

• Continuing take-up in a challenging period for consumers underscores the strong appetite for the premium VDSL service in which OTE has been investing substantially

VDSL Evolution (000)

219 57 49 37 150

“Continuously expanding VDSL Coverage” 43 FY 2013 FY 2014 FY 2015 FY 2016

ΟΤΕ Retail VDSL ΟΤΕ Retail VDSL Net Additions

FIXED MOBILE OTEGLOBE OTE ESTATE OTEACADEMY OTESAT-MARITEL OTE RURAL 5. Performance Review 2016 Greece Fixed 49 cosmote tv “COSMOTE TV – growth is • Responding to our customers’ need for affordable, high-quality entertainment fuelled by extensive, exclusive • Free-to-air channels content has deteriorated drastically in recent years, widening the quality differential versus Pay-TV and diverse content”

• Pay-TV is an affordable form of entertainment, providing extensive, exclusive and diverse content.

• COSMOTE TV is continuously strengthening its position in the Greek market, reaching more than 50% market share vs 45% in 2015 (56k new customers in 2016), expanding TV base to 503k and increasing revenues by +31%

• OTE entered the field of TV production with the launch of its own History Channel

COSMOTE TV Subscribers (000) TV Market Evolution (000)

TV revenues posted another year of solid increase 3-Year CAGR: 10.3% 3-Year CAGR: +25.2%

743 904 986 996 65.6% 60.9% 54.7% 49.5%

256 353 446 503 34.4% 39.1% 45.3% 50.5%

FY 2013 FY 2014 FY 2015 FY 2016 FY 2013 FY 2014 FY 2015 FY 2016

COSMOTE TV Subscribers COSMOTE TV Market Share Competitors’ TV Market Share (Based on internal estimates)

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Sports Events

UEFA Champions League UEFA Europa League Top Tier European Leagues Greek Cup Premier League, LaLiga Santander, Bundesliga, Serie A TIM

NBA Olympic Games Rio 2016 Formula 1 Tennis ATP 1000 Moto GP Tennis ATP 500 WRC ATP World Tour Finals

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Non - Sports Content

COSMOTE TV is further enhancing customer experience through the hybrid SAT and OTT functionalities and features while strengthening its offer through new content stories

Rebranding of Cinema Channels New Services: COSMOTE TV Plus COSMOTE History (Launched in 2016) (Launched in January 2016)

ΤΑ ΛΟΓΟΤΥΠΑ ΔΕΝ ΕΜΦΑΝΙΖΟΝΤΑΙ ΓΙΑΤΙ ΔΕΝ ΜΑΣ ΕΧΟΥΝ ΣΤΑΛΕΙ ΣΕ ΥΨΗΛΗ ΑΝΑΛΥΣΗ

• Unique Greek channel that broadcasts exclusively documentaries about Greek history and civilization • Acquisition of 900 documentaries from local and foreign producers (ARTE France, CBS, BBC, Discovery, PBS, National Geographic, A&E, Austrian Broadcasting Corporation, South Africa Broadcasting Corporation and other) • Production of 4 TV documentary series (Greece A- Z, Faroi, Korifes, Aytoi pou tolmisan) 2 New Studio Deals (Walt • Co-production of 15 single documentaries and strong presence and participation in Documentary Disney & Paramount) Festivals (Thessaloniki Doc Fest, Patmos) and the Academy Awards (Oscars)

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OTE ICT Services Development “A strong player in the ICT Business”

Information and Communications Technology (ICT) is a combination of services which combine network provision, equipment (networking), value added systems and services, i.e., integrated solutions which combine telecommunications and Systems Integration.

OTE Group’s ICT Services are grouped under five categories Major ICT Projects in 2016

M2M connections with the proper usage plans for telematics apps; M2M portal, • Completion & Operation of Coca–Cola HBC Group’s Data Center for 28 countries Machine for the most efficient management of M2M connections, M2M solutions for Fleet • Big Data Shared Service Center to Μachine Management Service and Building Energy Management • Fire Brigade Operations Center “M2M” • Upgrade of 2,500 OPAP shops and central points • National Telemedicine Network Connectivity IPVPN, Ethernet, Leased Lines, Value Added Services • Med Sea Health S.A.’s Miraggio Thermal Spa Resort

Networking LAN/WAN/WiFi; providing consulting services for the design, Networking implementation and support of large networks of customers; equipment reselling, installation, maintenance and man agrement services for customers; providing a service level agreement - SLA.

(IT Infrastructure, IT Managed Services, IT Security, e-Government, e-Health, IT Solutions e-Tourism, Smart Metering) For OTE Group, ICT constitutes a new, important source of Infrastructure as a Service “IaaS”, Cloud Servers, Cloud storage, Platform as a revenue and lies at the heart of Cloud Service “PaaS”, Web hosting, Cloud Database, Communication as a Service “CaaS”, its strategy. OTE is the #1 ICT e-mail, Video Conference provider in the Greek market.

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OTE Wholesale Business

Through its “OTE WHOLESALE” brand services, OTE enjoys a leading position in the wholesale telecom The strategic goals of the Wholesale Division are: market, offering voice and data services to local telecom operators, who form an essential part of the company’s customer base and constitute a significant revenue stream. • To maintain and strengthen a long-term mutually beneficial cooperation with Telecom Operators by providing them with state of the art Telecom Solutions and a high level of Services Having adopted the strategic message “Together, We Evolve”, OTE communicates its strong customer- oriented commitment for a continuous and dynamic course into the future, ensuring the sustainable • Το consistently develop and provide wholesale products and services that meet regulatory development and steady progress of all its stakeholders. OTE Group provides Domestic Telecom requirements Operators of electronic communications with advanced telecommunications services. • To retain OTE Group’s revenue The OTE WHOLESALE Division is a business unit for designing, developing and providing services to domestic Telecom Operators, via the “OTE WHOLESALE” brand. • To create new revenue streams and exploit OTE’s network infrastructure by providing flexible and attractive Wholesale products and services

OTE offers telecom operators the following services LLU Market Evolution (000) Wholesale Revenue Evolution (€ mn)

Value Added Data Wholesale Services Transfers Broadband (VAS) (ADSL & VDSL) 2,016 2,047 2,085 1,907 316 304 300 311

Local Loop Unbundling Interconnection (LLU & Collocation Services Services) FY 2013 FY 2014 FY 2015 FY 2016 FY 2013 FY 2014 FY 2015 FY 2016

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OTE Wholesale services competition OTE WHOLESALE Revenue Breakdown

Competition in the wholesale market remains intense as Operators continue to expand their Backbone Wholesale Network with own funds and partnerships in exchange for fiber optics infrastructure (network sharing), with an ultimate goal to decrease their operational costs. Other Broadband xDSL Voice €10mn €5mn OTE continues to invest in its network availability, as part of its strategy to provide advanced services, Service unparalleled know-how and best customer experience on all fronts. €25mn

Continued demand for Local Loop Unbundling (LLU) services Data In 2016 the demand for LLU services remained steady. The OLO’s end customers trend to return to Transfer OTE continued at the same pace as of year 2015. By the end of 2016, the number of active LLU lines €41mn reached 2.1 million (both Full & Shared LLU).

The LLU service posted growth of +2%, the same level as of 2015. For every month of 2016, the company acquired an average of 3,200 new LLU lines.

By the end of 2016, the number of OTE’s local exchanges providing Physical Collocation remained unchanged compared to 2015, namely 174 (85 in Attica, 15 in Thessaloniki and 74 in regional Greece), while the number of OTE local exchanges with Remote Collocation LLU Requests in came to 757 compared to 738 at the end of 2015.

Local Loop Unbundling (LLU) €230mn

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OTE WHOLESALE broadband access: development of Wholesale VDSL Vectoring technology

In 2016, ΟΤΕ made available to Telecom Operators over 38,000 Wholesale VDSL connections, Across 2016 the National Regulatory Authority (NRA) held a Public Consultation about expanding compared to 12,000 in 2015. These connections are offered to the telecom operators, bundled with commercial VDSL availability up to 100 MBps downstream, combining VDSL from street cabinets with the popular LLU service (where telephony is provided via LLU), so that they can further benefit from Vectoring technology. The NRA amendment published at the end of 2016, gives Significant Market their existing investment on LLU infrastructure. Power (SMP) and OLOs the ability to declare which areas they commit to provide up to 100 MBps in a 2 year timeline by using Vectoring or other NGA technologies The upward trend also noted in VDSL packages via OTE’s wholesale services is a further encouraging sign in terms of the significance and efficiency of OTE’s continued investments in NGA networks, yielding multiple benefits (ΟΤΕ, other Telecom Operators, final customers, digital indices, etc.) and Data transfer services opportunities for new forms of collaboration and revenue streams. Ethernet Wholesale Leased Lines (Ethernet WLL) services showed a substantial increase (457 Furthermore, OTE provides VPU Light, a high speed – VDSL technology - data service, where voice circuits in 2016 compared to 369 in 2015), despite the elimination of backhauling circuits due to the services may be provided by the OLO (Other Licensed Operators) using IP technology. The service development on the part of Operators of own infrastructure. aggregates the end users’ traffic data and delivers it to the aggregation switch situated in LE, via relevant backhaul services. In 2016, the VPU Light connections came to 359. At the same time, the Ethernet Mobile Backhaul services showed a slight decrease (49 circuits in 2016 compared to 54 in 2015) –they are replaced by fiber optic pair ROUs (Rights Of Use). The number of wholesale ADSL connections of the ARYS service came to 10,300. This number has declined significantly over the past years due to: Τhe number of Analogue & PDH/SDH* technology Wholesale Leased Lines (WLL: Wholesale Leased Lines) showed a small decrease of 4.2% in 2016. • The commercial policies of alternative Operators, who encourage their subscribers to turn to LLU services, taking advantage of the development of self-owned network infrastructures, and

• The adverse economic conditions that have led to the absorption by or exit from the market of companies that were active mainly in providing wholesale broadband connections

Visit: otewholesale.gr

*PDH: Plesiochorous Digital Hierarchy SDH: Synchronous Digital Hierarchy

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Financial Performance “Best EBITDA margin ever,

In 2016, Greek fixed operations posted revenues of more than €1.5bn, an increase of 2.1%, the second at 42.3%” in the row annual revenue increase since 2006.

OTE’s Adjusted EBITDA increased by 7.4% to € 664mn, yielding to a 210 basis point growth in margin.

• Fixed-Line revenues up - second year in the row - after years of contraction Financial Performance (€ mn) • Growth supported by strong performance in broadband, particularly VDSL, and Pay-TV

• The continuous development and penetration of triple play was a key strategic objective 1.6% 2.1% -2.9% -8.6%

1,557 1,512 1,536 1,569

36.5% 39.6% 40.2% 42.3%

664 568 599 618

FY 2013 FY 2014 FY 2015 FY 2016

Revenues Adjusted EBITDA Adjusted EBITDA Margin Revenue Trend Yoy %

FIXED MOBILE OTEGLOBE OTE ESTATE OTEACADEMY OTESAT-MARITEL OTE RURAL 5. Performance Review 2016 Greece Mobile 57 mobile overview

Throughout the year, amid tough economic conditions, the Greek mobile market was slightly down by COSMOTE Customer Base Evolution 1.5% in terms of Service Revenues. (000)

Based on its superior customer experience and technological leadership, COSMOTE maintained its leading position in the market with a service revenue share of 52%. 7,710 Mobile operators actively promoted converged offerings addressing household, as well as business 7,477 7, 28 0 7, 39 9 customer needs. Following the rebranding under the COSMOTE name of all of OTE Group’s customer- facing touch points in Greece, COSMOTE launched unified residential (COSMOTE ONE) and business (COSMOTE Business One) propositions to address the overall communication needs of the respective customer segments.

FY 2013 FY 2014 FY 2015 FY 2016

Spectrum Portfolio “Well Positioned to Meet Next Years’ Targets”

FIXED MOBILE OTEGLOBE OTE ESTATE OTEACADEMY OTESAT-MARITEL OTE RURAL 5. Performance Review 2016 Greece Mobile 58 network superiority “Steadily growing

In line with its strategy to increase its customer base, focusing on customer experience and the high Data Revenues” quality of services, COSMOTE invested in maintaining network superiority in terms of coverage and data speeds. COSMOTE further expanded its 4G footprint, now covering more than 93% of the Greek population, significantly ahead of competition.

Demand for mobile data usage continued to grow at a rapid pace in 2016, resulting in 51% growth in COSMOTE data traffic compared to 2015. Key drivers include: • Average active internet users take-up, at 40% of active base compared to 35% in 2015 (+5 p.p.) • 4G handsets subscribers reached 1.6mn, 30% of active base • Smartphones take-up, at 57% of active base compared to 52% in 2015 (+5 p.p.)

Furthermore, COSMOTE started commercial use of additional radio spectrum rights in the 800 MHz & 2,600 MHz bands that acquired at the end of 2014. By virtue of the total spectrum it now owns, the company will be able to further invest in the optimization of its telecommunications network, offer 4th generation (4G and 4G+) services and meet with yet greater success the increased consumer demands for advanced communications.

Data Revenues as % of Service Revenues Smartphone Penetration %

57% 21% 52% 20% 44% 14% 16% Focus on expanding data usage, taking advantage of its superior network 36%

FY 2013 FY 2014 FY 2015 FY 2016 FY 2013 FY 2014 FY 2015 FY 2016

FIXED MOBILE OTEGLOBE OTE ESTATE OTEACADEMY OTESAT-MARITEL OTE RURAL 5. Performance Review 2016 Greece Mobile 59

Financial Performance Financial Performance (€ mn)

-1.8% -2.8% Service revenues posted another With improving trend in service year of narrowing erosion revenues in the full year -6.4% and a solid EBITDA margin, COSMOTE is well positioned to -12.3% meet this year’s challenges COSMOTE is investing in maintaining network superiority, both in terms of coverage and Greek mobile operations data speeds. Data active users and maintained strong competitive 1,337 smartphone penetration continue positions with steadily 1,251 1,228 to grow rapidly growing data revenues 1,194

37.4% 36.7% 35.7% 33.7%

500 459 438 403

FY 2013 FY 2014 FY 2015 FY 2016

Revenues Pro Forma EBITDA Pro Forma EBITDA Margin Revenue Trend Yoy %

FIXED MOBILE OTEGLOBE OTE ESTATE OTEACADEMY OTESAT-MARITEL OTE RURAL 5. Performance Review 2016 Greece OTEGLOBE 60

International Telephony, Internet & Data Services

Brief description and main operations

OTEGlobe is an international wholesale telecommunications Carrier delivering a complete portfolio Visit of transport, voice, corporate and mobile services to other international Carriers, as well as to oteglobe.gr/en multinational Corporations. The company operates in the following sectors: • Development, design, planning, implementation and management of international voice, data and capacity networks • Commercial exploitation of all international services to telecommunication carriers • Integrated and fully manageable services (including international IP VPN) to large business clients through partners

International network footprint

OTEGlobe’s services are offered through its privately owned networks: • The Transbalkan Network (TBN), which connects Greece to Western Europe through the Balkans • The GWEN network, which provides interconnection to Western Europe through Italy • The international IP/MPLS network, which is based on the aforementioned core networks for providing. Internet and VPN services • The international voice network, upgraded with Softswitch technology to add new functionalities and expanded geographically

OTEGlobe International Submarine & Terrestrial Networks

------OTEGlobe GWEN Network OTEGlobe participation in submarine Cables GREECE F.Y.R.O.M. ------OTEGlobe TBN Network ----- AAE 1 1. Kastanies 1. Bitola ------Capacity From Local Partners ----- SeaMeWe-3 2. Alexandroupolis 2. Gevgelija MSP PoPs ----- Saphium (landing partners) 3. Promachonas ----- Ugarit 4. Kilkis BULGARIA ----- MedNautilus 5. Florina 1. Petrich ----- CADMOS 6. Kristalopigi 2. Svilengrad ----- CIOS 7. Melissopeira ----- TAT-14 TURKEY ----- Adria-1 ALBANIA 1. Edime 1. Koritsa 2. Kesan 2. Tre Urat

FIXED MOBILE OTEGLOBE OTE ESTATE OTEACADEMY OTESAT-MARITEL OTE RURAL 5. Performance Review 2016 Greece OTEGLOBE 61

OTEGlobe also participates in international submarine cable (e.g., SMW-3) consortia, including the new cable project Asia Africa Europe – 1 (AAE-1) which extends from Europe to Hong Kong and Singapore.

OTEGlobe is a landing party in AAE-1, connect- ing Greece to the other countries via the Chania landing station. The new submarine cable is expected to become operational within 2017.

IIIIIIIIIIIIIIIIIIIIIIIII Delivery of On-Net-Services

IIIIIIIIIIIIIIIIIIIIIIIII Delivery of Off-Net Services through Partners’ infrastructure

------Extension to MENA region and S. Asia throught AEE1 cable system

------SMW-3 cable system

FIXED MOBILE OTEGLOBE OTE ESTATE OTEACADEMY OTESAT-MARITEL OTE RURAL 5. Performance Review 2016 Greece OTEGLOBE 62

Achievements & other significant events in 2016 Financial performance in 2016

• Participation, as a landing party, in the Asia Africa Europe - 1 submarine cable consortium Revenue increased by 8% compared to 2015 standing at €340.8 mn. For yet another year, OTEGlobe has managed to increase its revenues, even though the markets, where the company is active, are • Promotion of flexible commercial packages in international voice under pressure.

• Development of LTE Roaming and SMS services, targeting MNOs Adjusted EBITDA Margin at 4.7% compared to 5.4% in 2015. This decrease is within market margins since high competition and price erosion within Europe has affected wholesale telecom business. • Development of a new backbone network, based on dark fiber lease, to connect Greece with Adjusted EBITDA in 2016 stood at €16.2mncompared to €17.3mn in 2015. Western Europe via Italy. The new Network, to become operational within 2017, will complement the existing GWEN (800G) network with an intital capacity of 1Tbps Expectations • Upgrade of existing networks (Greece and Transbalkan) with total capacity of 4Tbps (up to 2018). Through it’s participation in the next generation submarine cable AAE-1 (to become operational • Enhancement of commercial presence in the Middle East and North Africa via extended within 2017) OTEGlobe will re-establish itself in new developing markets with large profit partnerships margins, in Middle East, North Africa and SE Asia, broadening its area of activity.

FIXED MOBILE OTEGLOBE OTE ESTATE OTEACADEMY OTESAT-MARITEL OTE RURAL 5. Performance Review 2016 Greece OTE ESTATE 63

REAL ESTATE MANAGEMENT

Brief description Utilization of real estate 2016 Real Estate Strategic Priorities

Management, development and commercial • 2 Properties sold (6,000 sqm) for a total cash exploitation of OTE Group’s Real Estate portfolio in value of €11.4 million Monetize value of real estate Manage a large number of Improve the energy assets and optimize the Real complex construction projects efficiency and acquire related • 4,000sqm were rented to 3rd parties with Estate portfolio either to cover Group needs or certification (ISO 50001, Real estate strategy annualized revenue of €0.4 million to prepare assets for further LEED & BREEAM) in fully third party exploitation refurbished properties • To meet core business real estate needs

aligned with OTE Group’s strategy Technical works and ISO 50001 Continue efforts to achieve Become major LV energy Digitize own operations in the operational excellence by supplier for OTE Group extend possible • To monetize group real estate assets • Completion of a construction program, ~15,000 sqm, including Kerameikos ensuring quality of offered companies, seeking further services and cost optimization cost reduction • To carry out construction projects according refurbishment for COSMOTE/ E value call to accommodation and monetarization center use, OTE HQ 1st floor refurbishment strategy (CREM use), as well as corporate shops Real Estate Portfolio renovation and third parties needs 302 Energy • ISO 50001 certification for two major Plots buildings (Paiania & Acharnon) of Land • Acquired supplier’s permit by regulator (RAE) €823 mn • Establishment of Energy Unit with OTE Estate Property and facility management Portfolio functioning as a wholesale supplier for Group Fair Value* Visit companies • 20,000 CREM remedy requests resolved ote-estate.gr supporting 11,500 employees (70 incidents closed/day, 3.5 h response time) per year 1,990 during 2016 Buildings Revenues €59.8mn Adjusted EBITDA €50.4mn Properties: 2,292

* Portfolio fair value as per independent auditor’s valuation

FIXED MOBILE OTEGLOBE OTE ESTATE OTEACADEMY OTESAT-MARITEL OTE RURAL 5. Performance Review 2016 Greece OTEACADEMY 64

TRAINING SERVICES

Brief description Partnerships & certificates

Providing cutting-edge educational services which contribute to the development of human resources A certified training partner of: • The major ICT vendors: Alcatel-Lucent, Cisco, Microsoft, HP, Oracle & Cisco Academy Support Center • Project Management Institute (PMI) Major training programs • Certified Information Systems Security Professional (CISSP) Training Center in association with (ISC) 2 • Business Continuity Institute (the only certified training center in DT Group) In collaboration with OTE Group’s HR, OTEAcademy designed and implemented the following programs: • Service Desk Institute (SDI) • Branded Customer EXperience Excellence - BC2X for 3,882 participants in 26 cities (Net Promoter Score • Ian Farmer Associates - NPS 45.0%) • Advanced Certification in Telecommunication Technologies - ACT2 for 3,090 participants N( PS 79.06%) Furthermore, OTEAcademy is authorized as a VUE Testing Center, an ECDL and Certiport examination Center. • ACT2 for Non Techs, for 528 participants (NPS 90,70%) Finally, OTEAcademy is the only company, member of CXPA (Customer Experience Professional Association)

Leadership programs Financial performance Revenue Mix OTEAcademy in strategic partnership with Coverdale, and in collaboration with HR, localized and introduced In 2016 OTEAcademy, posted €7.4mn Revenues a Leadership Program (Exelixis) for the 209 Senior and 882 Section Managers of OTE Group. and €0.5mn Adjusted EBITDA.

Important facts in 2016

• After a tender, OTEAcademy undertook a large Culture Training Project for Papastratos (Philip Morris International) for the entire company (850 people) for the introduction of the new IQOS product line • In 2016, in association with ISC the company introduced the Certified Information Systems Security 45.2% 54.8% Professional Certification, one of the most recognized IT Security Certification worldwide Seminars Rent & Other • OTEAcademy, also introduced the Project Leaders’ Club, a community for Professionals interested for Project Management and Leadership • COSMOTE Scholarships: During the award ceremony OTEAcademy conducted an experimental training – psychodrama for the 51 scholars • ReGeneration: OTEAcademy, the Training Partner of the program (an initiative of The World Economic Visit Forum) assisted newcomers to the business world to develop their business skills oteacademy.com/

FIXED MOBILE OTEGLOBE OTE ESTATE OTEACADEMY OTESAT-MARITEL OTE RURAL 5. Performance Review 2016 Greece OTESAT-MARITEL 65

TELECOM SERVICES FOR THE SHIPPING INDUSTRY

In a few words: Key tasks

• OTESat-Maritel, is a Leading provider of Satellite Telecommunications services to Greek maritime • Maintain the leading position in the Greek Maritime market and further expand its presence and industry and one of the fastest growing providers to the Global maritime market operations in the Global market

• OTESat-Maritel extensive experience and background which combine the essentials of • Further build on customer experience with ICT and customized solutions, competitive commercial Telecommunications, IT applications and Maritime business, position it as the partner of choice in policy, targeted promotional programs and customer support (24/7) the Maritime Satellite Telecommunications market. • Provide high quality integrated ICT solutions by combining fixed, mobile, satellite networks and IT applications for B2B & Crew usage (Voice/VoIP, e-mail, internet, streaming M2M, and Milestones entertainment services) compatible with all IP based broadband satellite systems

• Harmonized with the OTE Group course of action; successful positioning of the new corporate image • Successful implementation and commercialization of Inmarsat maritime Global Xpress - Fleet in the Global Maritime Market Xpress in the Greek and Global maritime market

• Retained its leading position in the Greek Maritime market • Promotion of the company’s ICTs solutions and Fleet Xpress services in the Greek and Global maritime market • Increased its presence in the International Maritime Market and further strengthened its position by increasing revenues from International market by 22% Proven record of financially robust results: • Effectively shifted the majority of its Customer base towards high-end satellite broadband services by increasing its revenues from this services by 14% Revenues came to €22.6mn up 6% and Adjusted EBITDA to €1.3 mn for 2016

• Appointed by Inmarsat for the Global maritime market Global Xpress Value Added Reseller tier 1 for the new satellite maritime broadband service Fleet Xpress

Visit otesat-maritel.com/en/

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RURAL BROADBAND DEVELOPMENT IN GREECE Areas covered by the 3 ‘Rural Operators’

• After a public tender for the construction and operation of new wholesale broadband networks in Greece’s “white areas” (not broadband covered or planned to be covered), OTE won 2 out of 3 “lots” - Lot 1 & 3 (the country is split in 3 lots)

• As of December 2014, OTE RURAL NORTH & OTE RURAL SOUTH have begun the construction phase of Visit the rural broadband network in order to cover 2,229 settlements with a population of 323,532 in both oteruralsouth.gr LOT1 and LOT3 & oteruralnorth.gr • Each “Rural Operator” (SPV) must construct a network within 2 years and operate it for the next 15 years (the State has an option for a 2-years extension), following which the “Rural Operator’s” assets used for the network operation may be transferred back to the State

Cost and funding / financial subsidy

OTE RURAL NORTH & OTE RURAL SOUTH’s funding is constructed in the following way:

• Public Subsidy in total for both LOT1 and LOT3: ~€100.8mn • Private Contribution in total for both LOT1 and LOT3: equity capital ~€4mn and bond loan ~€31.7mn

Achievements to date

• The second milestone of the project was completed and overachieved in October 2016 linked to 60% population coverage in both LOTs, providing VDSL/FTTC technology • The commercial launch took place in December 2016 well before the completion and in parallel to the construction phase • Subsidy payments, related to second milestone, approx. €17.8m took place in December 2016 • The estimated date for the completion of the construction period of the project will be in Q4 2017 Lot 1 Lot 2 Lot 3

FIXED MOBILE OTEGLOBE OTE ESTATE OTEACADEMY OTESAT-MARITEL OTE RURAL 5. Performance Review 2016 ROMANIA 67

ROMANIAN BUSINESS OVERVIEW / HIGHLIGHTS

The Romanian telecom market is characterized by intense competition between Fiber optic, cable and TV market is almost saturated in terms of customers. The migration of analogue cable TV customers to ADSL technology providers in the broadband sector, resulting in high-quality services but leaving not much higher quality services (digital) is expected to continue. Telekom‘s strategy is to focus on Telekom TV as the space for revenue growth. Operators are focused on the roll-out of next-generation wireline and mobile main proposition in fixed & FMC, and as a differentiator in mobile portfolio. broadband networks and services, in order to retain subscribers and halt revenue erosion through the marketing of multi-play services. Despite strong competition and regulatory challenges, Telekom Romania’s vision is to create the no. 1 integrated operator in the Romanian market with strong focus on FMC offers. In 2016, Telekom Romania The Romanian fixed-line market has been volatile during the last years and product bundling helped to had a roll-out plan of intensive investments, mostly in infrastructure investments – reaching more than offset the negative impact of fixed-to-mobile substitution. Offering fixed telephony as part of broadband 2million households covered with fiber, thus continuing its path towards technological leadership. and TV packages was a successful strategy. Regarding Mobile Market Trends in 2016 all operators continued rolling out their 3G/4G networks. Fixed broadband service penetration continued to grow. Broadband market is fragmented, with around Competitors continued with aggressive offers and network quality improvements, gaining market share in 700 local internet access providers in mid year 2016 and FTTH/B being by far the largest fixed broadband both customers and revenues. technology. There is still room for penetration growth in rural areas. Competitors continued to invest in network upgrades and made acquisitions during the year. The Network cooperation agreements between Telekom Romania and Orange Romania have operationally started in May 2016, allowing Telekom Romania to offer extended 4G coverage to existing and new customers of mobile services and MagentaONE offers.

Household Penetration in Romania

64% 55% 58%

31%

Fixed Line Fixed Broadband Cable TV DTH TV

FIXED MOBILE 5. Performance Review 2016 ROMANIA 68

REGULATORY DEVELOPMENTS

Fixed-line business Review of the wholesale market of leased lines terminating segments • Review of the wholesale market of leased lines terminating segments (M6 from the Commission Q2 (M6 from the Commission Recommendation). The action is aimed Recommendation) 2016 at reviewing the market definitions and the competition status and to re-assess the previously imposed regulatory steps • The objective for 2017 is to obtain deregulation of the market and withdrawal of regulatory obligations

• Review of the relevant markets for fixed termination services - aimed to reassess the market definitions, the competition status and the previously imposed regulatory obligations Q3 Review of the relevant markets for fixed termination services. The action is aimed at reassessing the market definitions, the competition • Q4 2017 - Review of the tariffs of interconnection-related services, The objective for 2017 is the 2016 maintenance of FTR level as high as possible and avoidance of IP interconnection strict obligations status and the previously imposed regulatory obligations

• New infrastructure Law A new law no. 159/2016 entered into force and was published in the OJ no. 559/25.07.2016

• Removal of special construction tax as of 1st of Jan. 2017 As per the Fiscal Code’s provisions, 2016 Review of the tariffs of interconnection-related services, provided is the last year that the company has to pay this tax (~€10mn) Q4 at interconnection point. The action is aimed at reviewing the 2016 costing model, in order to reflect technological development Mobile business

Regulatory developments in Romania’s Mobile market

• New Infrastructure Law new law entered into force and was published in the OJ no. 559/25.07.2016

• Removal of special construction tax as of 1 January 2017

FIXED MOBILE 5. Performance Review 2016 ROMANIA 69

Regulatory issues that will concern Romania Mobile in 2017

• Implementation of Roam-like-Home obligations – 2nd stage as of 15 of June; Will generate decrease of retail roaming revenues, following charging retail domestic tariffs while roaming in UE and due to unlimited offers on Romanian market

• Review of the tariffs of interconnection and associated services The objective is to keep the MTR level as higher as possible and to avoid IP interconnection strict obligations

• Prepaid registration A new initiative for imposing prepaid registration might occur, leading to significant challenges in keeping the market share

MTRs Glide Path (eurocent/min) 9.06

6.4 5.67 5.03 4.05 3.07

Spectrum Portfolio 0.96

Dec.08 Apr.09 Jan.10 Jul.10 Mar.12 Sep.12 Apr.14

FIXED MOBILE 5. Performance Review 2016 ROMANIA Fixed 70

Technological and Commercial Progress Improvement in competitive positioning notably with business customers Since the T brand launch in September 2014 and until the end of December 2016, Telekom Romania gained 370k fixed-mobile convergent customers.

Telekom Romania has been investing in expanding its last-mile fiber coverage (reaching more than 2million households) and expanding its premium content offering. At the same time, the new bundled offers under the T brand are a unique market proposition. The combination of investments in networks and commercial presence are expected to improve the company’s market position over time.

Customer Experience (B2C) Customer Experience (B2B)

For 2016, the main Telekom commercial achievements were: 2016 marked a comeback in terms of customer experience, while the Telekom Romania remained focused on what it promised to deliver to B2B customers, not only related to quality but also to how • New investments were made in the expansion of the FTTH network (increase FTTH footprint with 697 they feel when interacting with the company, both online and offline. thousand households, reaching 1.6 million households) while increasing FTTH customers (Connected customers grew by 64% in 2016, reaching 175 thousand customers) Speed of the service delivery and assurance processes, as well as call response and service request • A new Magenta One portfolio was launched in April, increasing the number of integrated customers resolution times were carefully looked at and improved. to 298 thousand end of 2016, with a positive ARPU effect) Telekom strives to be seen by its customers as a reliable partner, dedicated to the growth of their TRO improved the Telekom TV experience, both content and technology wise: business.

• Telekom Romania offers the highest number of HD channels and exclusive football content U( EFA This is why it mixed all its solutions in a tailored, industry vertical approach, which customers can feel Champions League, UEFA Europe League) that they can use to improve their business. • Dolce Sport was the only television to broadcast live all 51 games from EURO 2016 • IPTV was used as a strategic product, offering the best TV experience in the market though At the same time it launched transformation program that looks to simplify internal processes, in order interactive features such as Catch-up TV, Cloud recordings, Video on Demand to ease the way we respond to service requests. • New IPTV features were launched: Pause Live TV & Startover TV • Telekom TV Web&Mobile offers the highest number of OTT channels in the Romanian market (up to 115) Magenta ONE proved to be a tremendous success after its launch in May 2015. Almost half of Telekom Romania customers now use Magenta ONE, the only true FMCC (Fixed Mobile Convergent Cloud) service in the market. Extended 4G coverage since Q2 2016, accelerated Magenta One sales.

FIXED MOBILE 5. Performance Review 2016 Romania Fixed 71

Telekom Romania is still a Market Leader for fixed voice services, Premium internet (MetroNET) continues to be a growth engine both in terms of RGUs and Revenues. Fixed Voice market for Data Services. Premium internet customers have the continues to decline, as usage rate drops, but Telekom Romania highest satisfaction index and sales registered a spectacular will continue its strategy to safeguard fixed voice services, by increase. For VPN Telekom Romania maintained and secured bundling it with FMCC, other Core and non-Core products its leader position, continuing raise quality standards Voice Data Services Services

ICT Cloud Solutions and M2M Services The emphasis on the further development of Business Solutions Telekom Romania continued the development of a Cloud Service brought about several new contracts/projects for the supply portfolio for business customers including software as a service of turnkey ICT solutions involving managed services, desktop for day to day activities and unified communications. In 2016 we virtualization, unified communications, IT security, and other launched products like Electronic Catalogue to help customers integrated telecom services for banks, the private and the digitalize their day to day activity and Office 365 Professional public sector. In addition, Telekom Romania started pilot projects Services to enable a swift transition from Standard services to for the implementation of Smart City solutions available true Digital solutions. While continuing its focus on existing M2M at Group level , which increased its presence in all areas of solutions like GPS Tracking, in 2016, Telekom Romania launched operating ICT solutions (consulting, design, and construction). new solutions in line with IoT (Internet of Things) trends

FIXED MOBILE 5. Performance Review 2016 Romania Fixed 72

Telekom Romania Fixed Lines Telekom Romania Broadband Subscribers (000) (000) 1,250 2,253 1,232

1,204 2,181 2,179 4.5% 1,186 2,151 -1.4% -1.5% -0.1% -1.3% -2.3% -3.3% -3.2%

FY 2013 FY 2014 FY 2015 FY 2016 FY 2013 FY 2014 FY 2015 FY 2016

Total Fixed Lines (000) yoy change % Telekom Romania Broadband Subscribers yoy change %

Telekom Romania TV Subscribers Telekom Romania FMC Subscribers (000) (000) 1,464 1,452 371 + 63.8% yoy 1,414 Increase in FMC customers 226 1,353 7.0 % 4.5% 2.7% 0.8% 56

FY 2013 FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016

Telekom Romania TV Subscribers yoy change % FMC Subscribers

FIXED MOBILE 5. Performance Review 2016 Romania Fixed 73

Financial Performance Financial Performance (€ mn)

In a very competitive market, the financial results reported by Telekom Romania Communications for 2016 show revenues slightly increasing by 0.1% at €603mn. Key areas such as TV and integrated offers continued to generate growth for the company. The level of revenues reflect mainly the continuous decrease of fixed voice segment, with corresponding revenues lower by 15% at the end of 2016. Adjusted -0.1% 0.1% EBITDA 2016 stood at €93.5mn, down by 21% compared to the same period last year. The results were affected by higher TV content and mobile and TV sets related costs, as a result of company’s focus on providing improved and seamless customer experience for both fixed and mobile segments. -1.2% -1.6%

610 609 602 603

26.1% 26.3%

19.7% 15.5%

159 160 118 94

FY 2013 FY 2014 FY 2015 FY 2016 Revenues supported by strong growth in FMC Revenues Adjusted EBITDA Adjusted EBITDA Margin Revenue Trend Yoy %

FIXED MOBILE 5. Performance Review 2016 Romania Mobile 74

General Strategy

Commercial premieres, customer excellence focus, all-in-one philosophy, significant investments in technology and infrastructure, are some of the major outcomes of Telekom Romania’s strategy based on innovation and technological leadership.Innovation plays a key role in our activity.

Commercial Premiers on the Local Telecom Market

• Further developed the fixed-mobile convergent (FMC) portfolio, with Telekom TV as a main component in the offer

• MagentaONE bundles for family with up to 6 mobile subscriptions Telekom strategy delivered the expected results in all the 3 communicated pillars

Build #1 integrated Technological leadership Transform the operating operator model: Setting a new The company continued to standard in customer care With the operational invest in top technologies, integration now complete with focus on expanding its • Everything in one place Telekom Romania continued fiber and 3G/4G coverage for all fixed and mobile to grow its FMC base via communication needs: MagentaONE integrated one Stop Shop, one Call offers - over 370k FMC Center, one Bill, one integrated customers MyAccount (including at the end of 2016 one mobile app and one click payment).

• 10 seconds average waiting time at the call center for residential and business customers of integrated fixed and mobile services

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Mobile 2016 at a Glance

The total market grew in 2016 mainly due to aggressive offers of operators amid strong competition. At the end of 2016, Telecom Romania’s market share stood at approximately 20% and its customer base reached approximately 5.3mn customers.

Telekom Romania made a major step in its mobile broadband strategy following a national roaming agreement with Orange Romania. Based on this agreement Telekom Romania customers are able to roam on Orange 4G/4G+ network, benefiting from extended 4G coverage and higher quality of 4G and 4G+ services. This step enabled Telekom Romania to consolidate its broadband offering by enhancing the 4G communications services, in addition to its best-in-class fixed FTTx technology which provides customers with internet speeds of up to 1 Gbps and best TV services.

Telekom Romania offers simplified integrated fixed and mobile bundles addressing both residential and business customers, who also receive a preferential 10 seconds waiting time at the call center. MagentaONE stands for one place for all fixed and mobile communication needs: One Call Center, One Bill, One MyAccount application (including one mobile app). Thus, customers enjoy a full and rewarding experience: 3G and 4G mobile voice and mobile data services, traditional fixed telephony, high speed internet up to 1 Gpbs and television on multiple technologies, including interactive television (IPTV), as well as high quality content and exclusivities - all available on the Telekom TV platform.

Telekom Romania developed the first Smart City pilot-project, consisting of four integrated components: Smart Parking, Wi-Fi connectivity, City Safety and Smart Lighting. The Smart City solutions operate on a dedicated Internet of Things (IoT) platform.

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Operational And Technological Progress

Investments in network infrastructure Residential market

• Mobile coverage improvement The first year after rebranding finds Telekom holding on position as the #1 choice for the family, best TV ---- W hit e Ar ea s (r eg ul at or y obligat ion) experience (plus a unique approach on pre-pay), having the one stop shop philosophy. ---- 2G/3G coverage improvement in Urban & Roads • Network inventory continuation & correlation with Customer Faults As a strategy, Telekom stays within its focus on retaining its customer base and securing its revenues, • Single Customer Database in Network area (CUDB) by encouraging pre to post migration, while gaining through FMC offers. Since the direction was cross- • Pre-Paid platform upgrade to support new Marketing requirements and various lateral sell/upsell to 4P packages, the convergence came as the next natural step. A continuous push of improvements through stronger integration with IT systems in order to reduce T2M smartphones and investment in 4G network as well as certain apps, such as Telekom TV, helped the • Ensure service availability and readiness for new features and functionalities by performing the Telekom to develop multiscreen services, thus enhancing its customers’ experience. Consequently, overall mobile SW network upgrade MagentaONE offers have delivered the expected success, at the end of December, with Telekom • Support traffic increase by expand mobile data network capacity numbering more than 298k customers with integrated bundles. • Simplify mobile network architecture and increase resilience by reducing by 70% the number of core network elements and implementation of pool functionality On the postpaid segment, Telekom Romania Mobile Communication S.A. continued to be the operator • Launch of LTE roaming with the simplest, most straightforward product portfolio. The increased competition eventually led to lower entry price points, the main three operators activating at the level of around €8, occasionally even Business market from €2. Prepaid segment faced similar evolution, with its main offers value decreasing from €6 to €5.

• Telekom Romania’s business segment continued to grow by exploiting the synergies between the Mobile Customer Base Evolution fixed and mobile customer bases and also by attracting new customers from competition with best (000) value offers, adapted to their vertical’s industry needs. Based on the usage and market trends, the new launched portfolio “Business Office” brought to the customers more value for money on 6,091 4G data and no worries with included 4G data bundles protected by Norton Security online on the 5,954 5,754 device the customer wants 5,345

• During 2016 the company continue to register positive performance, with 10.7% increase of business customers base YoY and 20.8% YoY in service revenues. Mobile data proved to be a significant growth driver on this segment, as reflected by the average usage in the base which increased by 32%, while the average 4G data usage doubled

FY 2013 FY 2014 FY 2015 FY 2016

FIXED MOBILE 5. Performance Review 2016 Romania Mobile 77

Financial Performance

Mobile Data Revenues were up 12% in Revenues up across all quarters, 2016, helped by increased coverage recording 4.2% increase in 2016

Data Revenues as % of Service Revenues Financial Performance (€ mn)

4.2% 0.2% -0.9% -4.2%

459 439 439 457 17.3% 25.9% 12.2% 14.9% 24.0% 19.9% 8.9% 17.9 %

119 106 87 82

FY 2013 FY 2014 FY 2015 FY 2016 FY 2013 FY 2014 FY 2015 FY 2016

Revenues Adjusted EBITDA Adjusted EBITDA Margin Revenue Trend Yoy %

FIXED MOBILE 5. Performance Review 2016 Albania Mobile 78

Regulatory Developments “New Regulation (introduced in 2015) was also

Retail regulation applied to current postpaid subscribers in 2016”

Non discrimination between on net/off net rates/volumes: • Introduced on 1 July 2015, relevant to tariff packages, offers, promotions, etc, for prepaid subscribers and for the new post-paid subscribers (including the renewals of existing contracts that will be made after this date) • Starting 1 January 2016 the regulation was also applied to current postpaid subscribers (migration MTRs Glide Path (eurocent/min) from old plans) 13.1 Wholesale regulation 9.1 • Full symmetry on MTR among three operators: Telekom Albania; Vodafone AL, Albtelecom (EM) 8.0 Proposed (1.48 ALL/min) 6.3 MTR • Asymmetry on MTR with Plus is 441% (6.52 ALL/min) 5.4 4.4 • NRA proposed on the new public consultation of mobile market analyze (Oct 2016): 3.3 ––– New MTR 1.22 ALL/min or to start on 1st September 2017 ––– Full symmetry on MTR among four operators on 1st September 2017 1.9 1.1 0.9

Spectrum auctions / renewals Dec.08 Jan.09 Sep.09 Mar.11 Sep.11 Sep.12 Sep.13 Apr.14 Dec.14 Sep.17

• Renewal of the Individual Authorization for 900/1800 MHz band of Vodafone Albania (June 2016) International MTRs Gilde Path • Individual Authorizations on 2100 MHz frequency bands for Plus (April 2016) (eurocent/min) • Individual Authorizations on 2500-2690 MHz bandwidth to Albtelecom (May 2016). • The process of public consultation on 800 MHz band sale announced for Jan 2017 26.8 Regulatory issues in Albania Mobile for 2016 21.9 15.7 17.9 13.0 12.6 Wholesale regulation 10.9 • Full symmetry with Plus expected on 1st Jan 2016 suspended from NRA for the period Jan-March 2016 • Plus full symmetry started on 1st April 2016 • Plus full symmetry was once again suspended on Sep 2016 following an appeal court decision, which backed its MTR to 6.52 ALL//min 2010 2011 2012 2013 2014 2015 2016

MOBILE 5. Performance Review 2016 Albania Mobile 79

Operational and Technological Progress

Deployment of IMS Core to support VoLTE, which LTE continued to deploy in 1.8 and 2.6 GHz is targeted mid 2017. spectrum, expanding to 38% of Territory and 73.3% of Population. LTE1800 was deployed in 200 sites IMS Core LTE Rollout and LTE+ via Carrier Aggregation enabled in 78 for VoLTE sites, offering max rates of 225Mbps. Achieved 8% penetration of 4G over active users. Subscribers migration from legacy HLR to new Subscriber Data Management platform.

3G network increased to 480 sites (110 new sites), achieving 96.4% of population and 87.8% Migration SRAN Modernization rollout, started on September from legacy SRAN 2015, achieved to 72% of 4 years scope, replacing of territory coverage. High capacities of HSPA+ Modernization 42/21 Mbps data speeds increased to 96.3% HLR to SDM legacy 2G and 3G stations, expanding 3G layer of 3G network footprint. 2 new mcRNCs were & upgrading to 42Mbps and site infrastructure introduced in the network. Considerable Market transformation from indoor to outdoor. Share increase in South Albania by ~10pp, while 15% increase in overall users YoY.

3G Network IP Transformation Expansion 81% of total legacy MW links were replaced by new IP MW links. MPLS-TP was deployed in 50% of transport network. Fiber Fiber BW capacity was leased to cover demands of IP Backhauling of LTE CA in 64 sites. Also, Dark Connectivity Fiber was leased for 3 main transmission nodes of Backbone Transport Network.

MOBILE 5. Performance Review 2016 Albania Mobile 80

Financial Performance Telekom Albania Customer Base Evolution (000)

Growth in mobile handset data revenues 2,058 2,056 Telekom Albania managed to maintain its strong position in the highly competitive, four MNO Albanian 1,730 1,839 market. Despite the negative impact that the international wholesale traffic had in the Albanian market and the impact of regulatory changes (MTRs), Telekom managed to grow its prepaid revenues yoy that represent the majority of its customer base and to stabilize its post paid business.

Telekom Albania’s strategy on this new competitive landscape aims in further building on the very successful rebranding while also on the company’s Technological superiority and best services offered to the Albanian Consumers; undertaking a leading role in market stabilization and market repair while ensuring healthy and strong cash flows. FY 2013 FY 2014 FY 2015 FY 2016

Transformation and data monetization Financial Performance (€ mn) During the year the company continued the expansion of its 4G & 4G+ coverage through out Albania and the modernization of its existing network reaching a population coverage of 96% in 3G and 73% in 4G. During Q4, Telekom Albania achieved a 28% increase in mobile handset data revenues, 1.5% fueled by its highly competitive smartphone and data service offering supported by the extensive -2.7% 4G network rollout and the quality of its network, once again rated the best in the country. -5.5% -6.7% Continuous focus on: • Network development to continue and ensure leadership in terms of technology • Enriched data services & product portfolio to enhance data usage 86 82 83 • Significant increase in Smartphone penetration in prior years, but there’s still room for further growth 77 39.1% 36.6% 24.9% 20.9% 34 28% increase in mobile handset data revenues in the last 30 21 16 quarter of 2016, fueled by its highly competitive smartphone and data service offering FY 2013 FY 2014 FY 2015 FY 2016 Revenues Adjusted EBITDA Adjusted EBITDA Margin Revenue Trend Yoy %

MOBILE 5. Performance Review 2016 Albania Mobile 81

Data Revenues as % of Service Revenues Awarded by P3 Certificate of “Best in Test” Network in Albania 15.1% 10.4% Great improvements of data service in urban areas due to LTE deployment 9.2% Best web browsing among all operators in metropolitan areas 8.0% Strong YouTube performance with excellent Customer Experience in urban areas Best data DL speeds offered FY 2013 FY 2014 FY 2015 FY 2016 Better than competition in LTE/3G voice services The only operator with overall improvement vs. 2015

Best TRI*M Index along 2016

Telekom Albania kept leading position in the market in TRIM Index along 2016, with a significant growth in Q4’16, scoring the record of 91 points, with top strength in areas of Customer information, New offers and Network.

TRI*M Index

91 480 200 87 86 86 3G Stations 4G Stations 86 84 83 81 Q1’16 Q2’16 Q3’16 Q4’16

Telekom Albania Competitors overall

MOBILE 6 Corporate Governance Lines of principles that matter Corporate Governance Lines of principles that matter

Going beyond our local legal obligations. Adhering to international Corporate Governance standards

OTE complies with the Hellenic Corporate OTE approaches its operations Governance Code (HCGC) responsibly through a Code practices issued by of Conduct, a Compliance the Hellenic Corporate Management System and Governance Council (HCGC)* transparency in its practices *HCGC is a member of the European Corporate Governance Council Network 6. Corporate Governance Overview 84

1 Overview Shareholders 2 OTE’s Corporate Governance System General Assembly of Shareholders Minority Shareholder Rights

Transparency Board 6 Procedures 3 of Directors Composition Internal procedures based on & By-laws applicable legislation Conflict of Interest Other transparency practices BoD Committees Company by-laws

5 Control Management 4 Internal Audit Mechanisms Team Management Team External Audit Compliance Management System Risk & Insurance Management System

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OTE’s Corporate Governance System

The Corporate Governance framework for listed companies is a combination of legislation and soft law which OTE’s Corporate Governance Structure include, among others, corporate governance codes.

• As a large capitalization company listed on the Athens Stock Exchange with its shares also traded on appoints the London Stock Exchange, OTE complies with applicable domestic and international legislation GA of Shareholders

• According to the Hellenic Corporate Governance Code (HCGC) for listed companies as in force, the Reports principle “comply or explain” applies. Hence any deviation is justified. Audit Committee • OTE includes the Corporate Governance Statement (in line with applicable legislation) in its Annual External Audit BoD Reports Report of the Board of Directors Compensation • The legislative and regulatory framework and the corporate governance practices implemented by the & HR Committee company are reflected in its Articles of Incorporation, Internal Regulation of Operation, its by-laws and the internal policies and procedures mentioned in this Report. Chairman of Reports the BoD/CEO Internal Audit

At the heart of good Corporate Governance are:

Management Board OTE Group Compliance, Enterprise Risk and Corporate Governance Business Area Committee

Managers Compliance Management System The role of the The role of the Board Enhancement & Risk & Insurance Shareholders and of Directors and the of transparency Management System the protection of the Management team and control minority rights

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General Assembly of Shareholders

• The General Assembly of Shareholders is the company’s supreme body and has the right to decide on all matters of the company, except for the matters falling within the competence of the Board of Directors or the Managing Director according to the Law and the company’s Articles of Incorporation

• It convenes at the call of the Board of Directors in an ordinary session at least once a year and by the 10th day of the ninth month from the end of the fiscal year. The Board of Directors may also convene Extraordinarily General Assemblies of Shareholders whenever it is deemed necessary. A General Assembly may also be called upon request by minority Shareholders

• As a general principle, the General Assembly is in quorum and convenes validly when at least twenty (20) percent of its paid-in share capital is present or represented

• There are cases, specified in the law and the company’s Articles of Incorporation, when a special quorum of 2/3 of the company’s share capital is required

Some Special Quorum Cases

Merger or Increase or Issue of Dissolution of Decrease of the Bond Loans the Company Share Capital Convertible to Shares

Relevant Links: OTE’s Articles of Incorporation OTE’s Corporate Governance Statement (included in OTE’s Annual Financial Report)

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Minority shareholder rights

Minority Shareholders have certain rights, according to applicable legislation, regarding:

The convocation of General Assemblies of Shareholders Provision of specific information related to the company, the members of its BoD and the Requested by Shareholders that represent 1/20th of share capital management • The BoD must convoke an Extraordinary General Assembly of Shareholders, setting the day of the Requested by any Shareholder meeting, which must be no more than 45 days from the submitted request to the Chairman of the BoD Following the request of any Shareholder, communicated to the company at least 5 full days before • The request includes the subject of the Agenda the General Assembly, the BoD must provide to the General Assembly the requested, specific information with respect to matters of the company to the extent that this information is useful for the actual assessment of the items on the agenda Additional items on the agenda of General Assemblies of Shareholders Requested by Shareholders that represent 1/20th of share capital • The BoD is obliged to include additional items in the agenda of the General Assembly to be held, Remuneration info provided that the relevant request is received by the BoD at least 15 days before the General Assembly Requested by Shareholders that represent 1/20th of share capital • The request for an additional item must be accompanied by a justification or a draft resolution to be • The Board of Directors must announce to the General Assembly, provided that it is ordinary, the adopted in the General Assembly amounts which during the last two years were paid to each member of the Board of Directors or the • The revised agenda is made public in the same manner as the initial agenda, 13 days before the managers of the company, as well as any benefit to these persons for any reason or any contract General Assembly and at the same time posted on the company’s website, together with the between them and the company justification or the draft resolution that was submitted by the Shareholders

Ιnfo on company affairs and financial situation Draft resolutions by the BoD Requested by Shareholders that represent 1/5th of share capital Requested by Shareholders that represent 1/20th of share capital • The Board of Directors must provide to the General Assembly information with respect to the course of • The BoD makes available to the Shareholders the draft resolutions for the items included in the initial the company affairs and the financial condition of the company or revised agenda at least 6 days before the General Assembly, if the relevant request is communicated to the BoD at least 7 days before the General Assembly Petition to vote by roll call Requested by Shareholders that represent 1/20th of share capital Postponement of a resolution • The decision on any subject of the agenda of the General Assembly is taken by roll-call vote Requested by Shareholders that represent 1/20th of share capital • The Chairman of the Assembly is obliged to postpone, only once, the decision-making of the General Assembly, ordinary or extraordinary, for all or some items of the agenda, setting as date on which the Assembly will continue the date set in the Shareholders’ request which may not be later that 30 days from the date of the postponement

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Τhe members of the BoD are elected for a three-year term of office. They can be re-elected and may be recalled at any time by the General Assembly of Shareholders.

The company’s BoD comprises of 10 members

Relevant Links: The Regulation of Operations of the Board of Directors OTE’s Articles of Incorporation OTE’s Corporate Governance Statement (included in OTE’s Annual Financial Report)

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Michael Tsamaz Chairman & CEO, Executive Member

Mr. Michael Tsamaz heads OTE Group, the largest telecommunications provider in Greece and SE Europe, since November 2010. Under his leadership, OTE has been implementing a multilayered operational & financial restructuring strategy achieving its transformation from former Greek telecoms state monopoly into an efficient, integrated operator. He also leads OTE’s mobile arm, COSMOTE, since 2007. COSMOTE, market leader in Greece, is today one of the best performing mobile operators in Europe. Since 2001, Michael Tsamaz held several senior roles within OTE, overseeing the course of its international investments and served as CEO & BoD member for a number of OTE & COSMOTE international subsidiaries. He also served as BoD member of EE, UK.. Mr. Tsamaz is also Chairman of the Board of Telekom Romania Communications S.A.. Prior to his tenure at OTE Group, he held high ranking positions in Marketing, Sales & General Management for multinational companies such as Vodafone and Philip Morris. Mr. Tsamaz holds a degree in Business Administration from the University of New Brunswick, Canada.

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Konstantinos Christopoulos Charalampos Mazarakis Vice Chairman, Independent, Non-Executive Member Executive Member Audit Committee (Member) Mr. Charalampos Mazarakis, has over 20 years of professional experience, chiefly in senior manage- Mr. Konstantinos Christopoulos holds a PhD and a postgraduate degree in Economic Development from ment positions in Greece and abroad. Before joining OTE Group, in July 2012, as OTE Group Chief University Paris I-Pantheon Sorbonne and a degree in Economic Studies from the University of Macedonia Financial Officer, he was Group Chief Financial Officer (CFO) of the National Bank of Greece, and from as well. He worked with OTE from 1988 until 2014, in various positions in the area of Foreign Investments 2008 until 2010 Group Chief Financial Officer (CFO) and Member of the Group Executive Committee and Financial Operations (Planning, Controlling, Reporting, Accounting, Treasury, Procurement etc). of TITAN Cement company. Mr. Mazarakis served in various executive positions in Vodafone Group: During the period 2007-2013he was the head of Strategy Planning and Financial Services Department, Group Finance Director and BoD Member in Greece (1999-2006), CEO in Hungary (2006-2007), while in the period 2013-2014 he was the head of Group Corporate Finance Department. Mr. Christopou- Chief Operating Officer and BoD Vice-Chairman (2007-2008). He held the position of Finance Direc- los was a member of Board of Directors of: Hellenic Center of Productivity-ELKEPA-(1989-1992), Telekom tor and Member of the BoD at Georgia Pacific-Delica in Greece (1997-1999), while prior to that, he Serbia (2004-2011) and OTE Estate (2009-2014). He is the author of the book “Trends of Capital Devel- worked as Financial Analysis Manager at Procter & Gamble, first in Athens and then as Financial opment in Greece” (Modern Era publications, 1991), and of articles with subjects: Globalization of Econo- Analysis Group Manager at the European Centre in Brussels. Mr Mazarakis holds a Bachelor’s degree my, Privatizations, Telecommunications. in Business Administration from the University of Piraeus (with distinction) and an MBA from the Fisher College of Business at The Ohio State University (Wielder Scholar), where he held the post of Teaching Assistant in Finance. He has been ranked among the 30 most distinguished Finance Man- agers of Europe under the age of 40 (CFO Europe magazine, 2002). Robert Hauber Non-Executive Member

Dr. Robert Hauber studied at the University of Stuttgart, University of Mainz and at the University of Massachusetts. He holds a Master degree (Dipl. Kfm.) and a doctoral degree (Dr.) - both in business administration. He served Deutsche Telekom for ten years as a senior finance executive in several management positions. Before his career with Deutsche Telekom he worked for Hewlett Packard, Procter & Gamble and DaimlerChrysler, where he was involved in the merger between Daimler-Benz & Chrysler. Within Deutsche Telekom, Dr. Robert Hauber worked from 2002-2005 as Vice President Financial Con- trolling of T-Mobile International and from 2005-2009 as Senior Vice President Financial Controlling of T-Mobile International. Between 2009 and 2011 he has been Head of Financial Controlling of the Europe Segment of Deutsche Telekom. In this role, he was Member of the Board of Directors of T-Mobile Czech Republic and Member of the Supervisory Board of T-Mobile Austria and Member of the Supervisory Board of Polska Telefonica Cyfrowa (PTC). During April 2011-June 2016 he was Chief Financial Officer, Vice Chairman of the Executive Management Board and Member of the Board of Directors of Slovak Telekom. In July 2016 Dr. Robert Hauber came back to the headquaters of Deusche Telekom as Business Leader and became Senior Vice President Finance Europe. In his new role, he is responsible for the financial management of Europe and Technology.

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Raphael Kübler Athanasios Misdanitis Non-Executive Member Non-Executive Member Audit Committee (Member until 15/05/2017) Audit Committee (Member) Compensation & Human Resources Committee (Member) Mr. Athanasios Misdanitis is a Special Advisor to the Deputy Prime Minister of the Hellenic Republic, re- Dr. Raphael Kübler in January 2014 assumed the position of Senior Vice President of the Corporate Op- sponsible for Economic and Fiscal Policy, Banking and Finance as well as Digital policy, Telecommunica- erating Office of Deutsche Telekom and reports directly to the Chief Executive Officer of Deutsche Tele- tions and FinTech. Since April 2015 he is a member at the Board of Directors of OTE Group of Companies kom. From July 2009 to December 2013, Mr. Kübler served as a Senior Vice President Group Controlling while also he is a member of the Audit Committee of the Group. Additionally he has been appointed at at Deutsche Telekom. In this position, he was responsible for the financial planning, analysis and steering the High Council of the newly established EquiFund (ESIF Fund of Funds). He is a PhD Candidate in Eco- of the overall Deutsche Telekom Group as well as the financial management of central headquarters nomics at the Department of Applied Mathematics and Physics of the National Technical University of and shared services. From November 2003 to June 2009, Mr. Kübler served as Chief Financial Officer of Athens, he has a postgraduate degree (Business Innovation with Entrepreneurship & Innovation Man- T-Mobile Deutschland GmbH, the mobile operations of Deutsche Telekom in Germany now known as Tel- agement) from Birkbeck College, University of London and he is a certificated Economist from Aristotle ekom Deutschland GmbH (a wholly-owned subsidiary of Deutsche Telekom). From July 2000 to October University of Thessaloniki. He is an economist with solid background in Economics/Finance/Public Policy 2003 he served as Senior Vice President Mergers & Acquisitions of Deutsche Telekom. Mr. Kübler studied and experienced in working closely with diversified scholars and experts in policy making and consulting. Business Administration at H.E.C. in Paris and the Universities of Bonn and Cologne. He holds a doctoral Mr. Misdanitis participated in the negotiations fort he conclusion of the 3rd Greek Fiscal Adjustment Pro- degree from the University of Cologne. gram with the European Institutions and the International Monetary Fund (2015), while inter alia he is a member of the team which in collaboration with the European Investment Bank (EIB) and the European Investment Fund (EIF), processes and plans the financial instruments fort he period 2014-2020. He has Srinivasan (Srini) Gopalan worked as a consultant and analyst in the private sector in start-ups companies in Greece and in Great Britain. He was an economic analyst and researcher at Hellenic Parliament’s Vice President’s Cabinet. Mr. Νon-Executive Member Misdanitis is a member of Greek Economic Chamber. Compensation & Human Resources Committee (Member)

Since January 2017 Mr. Srini Gopalan is a member of the Board of Management of Deutsche Telekom AG. He is responsible for the Board AreaE urope. Prior to his current position Mr. Gopalan was Consumer Director India at Bharti Airtel Ltd. where he was responsible for the consumer business in 23 different regions of India, which covered broadband connections and satellite TV in addition to mobile communications. His work focused on generating USPs through innovative offerings, which helped differentiate Airtel in a highly price sensitive market. Before joining Bharti Airtel, Srini Gopalan worked in the UK for over ten years – at first in a number of functions for Capital One, an American financial services provider, which he left as Managing Director UK in 2009. He then worked as Chief Marketing Officer at T-Mobile UK, where he was responsible for marketing and sales. He was part of the management team that led T-Mobile UK to the joint venture with Orange, Everything-Everywhere. After this, he served as Director Consumer Business Unit at Vodafone UK for three years. Srini Gopalan studied Business Administration at the renowned St. Stephen’s College in New Delhi and later earned his MBA at IIM Ahmedabad, India’s leading business school.

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Andreas Psathas Panagiotis Tabourlos Non-Executive Member Independent, Νon-Executive Member Audit Committee (Chairman) Mr. Andreas Psathas is a PhD Candidate at the School of Architecture of the National Technical Uni- Compensation & Human Resources Committee (Chairman) versity of Athens. He holds a Diploma in Rural and Surveying Engineering (N.T.U.A.) and is a member of the Registry of Certified Valuers of the Ministry of Economics. Since 2004 he has participated in sev- Mr. Panagiotis Tabourlos is a graduate of the Piraeus University of Economics and holds a Master’s eral scientific unions and committees and has been a member of the Assembly Presidium of Technical degree in Business Administration (MBA) from McGill University (Montreal, Canada). Since 1980 he has Chamber of Greece (2013), and of the Scientific Committee of Expert Witnesses and Real Estate Valuers worked as Finance Manager in various corporations, including Milchem International, Hilti SA, Ameri- (2015). He worked at the Trans Adriatic Pipeline (TAP) (2014-2015), as Land Easement and Acquisition can Express and ICI. From 1990 to 2003 he worked for Pfizer/Warner Lambert SA, where immediately Manager, for EON Technologies. From August 2007 until August 2013 he was a member of the Body of prior to his departure he held the position of Regional CFO for Europe, Middle East and Africa. From Sworn-in Valuers of Greece, and he participated as an expert, in the major road concession projects, in June 2003 until April 2004 he held the position of Chief Financial Officer at OTE. He then resumed the other co-financed projects and in the estimation of the property of several Real Estate Investment Com- position of Group CFO at Frigoglass SA, which he held until October 2013. From November 2013 he panies. He has also worked as a self-employed engineer and as an associate in many technical offices, assumed the responsibilities of Corporate Development & Strategy Director until his departure in May contributing to several studies. 2014. Mr. Tabourlos serves as Chairman of OTE Audit Committee, being also its financial expert. He is also Chairman of OTE Compensation & Human Resources Committee, as well as member of COSMOTE Board of Directors.

Panagiotis Skevofylax Non-Executive Member

Mr. Panagiotis Skevofylax is a special adviser at the Office of the Deputy Prime Minister, while from June 2014 to January 2015 he was a special adviser to the Hellenic Parliament’s 4th Deputy Speaker’s Office. He holds an MA in Media & Communications from City University London (specialization in Politi- cal Economy of Media & Communications), and two MScs from the National and Kapodistrian Univer- sity of Athens in Political Science & Sociology (specialization in Political Analysis) and in European & International Studies (specialization in European Affairs) respectively. Mr. Skevofylax has worked as a consultant in the fields of Strategy and Communications (political and policy analysis, political consulting and coaching, political campaigning, integrated communications planning etc).

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Conflict of Interests

The Internal OTE must be notified by the BoD Regulation of members for the following: Operations of the Company • Of any participation in the share capital of The OTE Group The OTE Group other companies that exceeds 10% • They and their relatives up to second degree Anti-fraud Policy Code of Conduct are not engaged in competitive activities • They and their relatives up to second degree are not in a situation where their interests are in conflict or appear as being in conflict with the interests of the OTE Group • They declare annually their professional Reference to the The OTE Group engagements including significant non The OTE Group conflict of interest of Policy on Avoiding executive commitments in companies and non-profit organisations/foundations Policy on Insider BoD members is made Corruption and • They declare that they are aware of and Trading in specific company other Conflicts accept all the Compliance Management regulations and policies: of Interest System Policies of the company • They and the persons closely associated to them disclose: a. their significant transactions or any other financial activity or their intention for such activities, with company’s The OTE significant Suppliers or/and Customers/ The OTE Group Group Policy Domestic Providers , and b. their transactions Sponsoring Policy on Accepting on Securities of the company and Granting • The independent members confirm that the impediments of article 4 of L. 3016/2002 of Benefits The OTE Group do not exist Donation Policy

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Audit Committee

Operation Role Issues in 2016 Meetings

• Its members are members of the BoD elected The objective of the Audit Committee is to In 2016, the Audit Committee dealt with issues • Holds ordinary (taking place 4 times a year) by the General Assembly of Shareholders support the company’s Board of Directors in the within the framework of its responsibilities, or extraordinary meetings • Following the issuance of Law 4449/2017 exercise of the latter’s supervisory authority and summarized as follows: • Meets in quorum and convenes lawfully when and the resolution of the Extraordinary the fullfilment of the latter’s obligations towards its Chairman plus two members are present General Assembly of the company’s Shareholders, the investment community and • Approval and monitoring of the company’s • Resolutions are passed by an absolute Shareholders, held on 15.05.2017, the Audit third parties, especially with regard to the Internal Audit business unit activities. majority of the total number of its members Committee consists of 3 members out of financial reporting process. • Approval and monitoring of the activities of • Held 14 meetings in 2016 which 2 are independent non-executive the business unit Compliance, Enterprise Risk members so the majority of the members of Management & Insurance. the Audit Committee are independent to the • Assessment of the accuracy and consistency company in accordance with Law 3016/2002 of Financial Statements. on corporate governance, according to article • Assurance of the Statutory Auditors’ 44, L. 4449/2017 independence, in relation to the services • At least one member must have proven provided by the latter to the companies experience in the field of accounting and of OTE Group and approval of the budget auditing for relevant fees of the Statutory Auditors for fiscal year 2016, in the context of the approved by the Board of Directors “Policy for Commissioning Services of Auditors”. • Expression of opinion on the appointment of statutory auditors. • Handling of complaints and allegations, and furthermore review and assessment of the completeness, accuracy and precision of the Periodic Compliance & Enterprise Risk Reports Relevant Link: Audit Committee Regulations

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Compensation & HR Committee

• Sets the principles of the company’s human resources policy • Defines the company’s compensation and remuneration strategy • Approves the plans concerning compensation, benefits, stock options and bonuses Role • Makes proposals to the BoD regarding The Committee, within the framework of its the compensation and benefits of the responsibilities, dealt ,among others, with executive BoD members the issues below: • Defining the company’s compensation and remuneration policy Operation Issues • Approval of the schemes and plans in 2016 concerning compensation, benefits, stock options and bonuses • Proposal to the Board of Directors regarding the compensation and benefits of the Managing Director • Furthermore, in this context, in 2016 the Compensation and Human Resources Meetings Committee has examined and submitted The Committee is appointed by the to the Board of Directors proposals, company’s BoD and during 2016 consisted among others, for compensation issues of 3 BoD members: of the executive members of the Board • Since 25/2/2015 the Committee consists and business policies on remuneration exclusively of non-executive members of the Board of Directors • The Chairman of the Committee is also appointed by the BoD Held 5 meetings in 2016

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Chief Executive Officer Michael Tsamaz

OTE Group Chief Information OTE Group Chief Strategy, OTE Group Chief Human Technology Officer Transformation & Wholesale Officer Resources Officer Georgios Athanasopoulos Ioannis Konstantinidis Elena Papadopoulou

OTE Group Chief Financial Officer General Counsel - Chief Legal Executive Director Compliance, Charalampos Mazarakis & Regulatory Affairs Officer ERM & Insurance OTE Group Eirini Nikolaidi Aristodimos Dimitriadis

OTE Group Chief Technology OTE Group Chief Commercial Executive Director Internal & Operations Officer Officer Business Segment Audit OTE Group Stefanos Theocharopoulos Grigoris Christopoulos Konstantinos Vassilopoulos

Executive Director Business OTE Group Chief Commercial Executive Director Corporate Security & Continuity OTE Group Officer Consumer Segment Communications OTE Group Konstantinos Megas Kostas Nebis Deppie Tzimea

BOARD MANAGEMENT CONTROL TRANSPARENCY PROCEDURES OVERVIEW SHAREHOLDERS OF DIRECTORS TEAM MECHANISMS & BY-LAWS 97 Michael Tsamaz

Chief Executive Officer

Back to the Management Team Mr. Michael Tsamaz heads OTE Group, the largest telecommunications provider in Greece and SE Europe, since November 2010. Under his leadership, OTE has been implementing a multilayered operational & financial restructuring strategy achieving its transformation from former Greek telecoms state monopoly into an efficient, integrated operator. He also leads OTE’s mobile arm, COSMOTE, since 2007. COSMOTE, market leader in Greece, is today one of the best performing mobile operations in Europe. Since 2001, Michael Tsamaz held several senior roles within OTE, overseeing the course of its international investments and served as CEO & BoD member for a number of OTE & COSMOTE international subsidiaries. He also served as BoD member of EE, UK. Mr. Tsamaz is also Chairman of the Board of Telekom Romania Communications S.A. Prior to his tenure at OTE Group, he held high ranking positions in Marketing, Sales & General Management for multinational companies such as Vodafone and Philip Morris. Mr Tsamaz holds a degree in Business Administration from the University of New Brunswick, Canada.

BOARD MANAGEMENT CONTROL TRANSPARENCY PROCEDURES OVERVIEW SHAREHOLDERS OF DIRECTORS TEAM MECHANISMS & BY-LAWS 98 Georgios Athanasopoulos

OTE Group Chief Information Technology Officer

Back to the Management Team

Mr. Georgios Athanasopoulos is Chief Information Technology Officer at OTE Group. Mr. Athanasopoulos joined OTE Group in 2002, as OTE Investments Information Systems Executive Director, while since September 2006 he held the position of Operations Executive Director in OTE Globe. Since October 2007, he has also been COSMOTE’s Operations & IT Systems Chief Officer. Before joining OTE Group, Mr. Athanasopoulos worked for Atos Origin as SE Europe Sales Support Regional Manager as well as for Vodafone Greece, as Deputy Manager for Business Systems. Mr. Athanasopoulos holds a B.Sc. in Economics from the University of Athens (1991) and an M.Sc. in Computing from Cardiff University, UK (1993). He is married with one child.

BOARD MANAGEMENT CONTROL TRANSPARENCY PROCEDURES OVERVIEW SHAREHOLDERS OF DIRECTORS TEAM MECHANISMS & BY-LAWS 99 Ioannis Konstantinidis

OTE Group Chief Strategy, Transformation & Wholesale Officer

Back to the Management Team

Mr. Ioannis Konstantinidis has been OTE Group Chief Strategy, Transformation & Wholesale Officer since November 2015, having served as Chief Strategic Planning & Transformation Officer since June 2011. From 2000 until 2011 he held various senior managerial positions at OTEGlobe, an affiliated company of the OTE Group, among which the latest was the position of the Chief Operating Officer, responsible for the commercial and technological development of the company. Today, besides his tasks at OTE, he is the Chairman of the Board of Directors of OTEGlobe, as well as Chairman of the Board of Directors of OTE Rural North & South. Prior to the OTE Group, he worked for Global One Hellas SA, where he was head of the Technical Depart- ment. He holds a degree in Electrical Engineering from the National Technical University of Athens, with a specialization in Telecommunications.

BOARD MANAGEMENT CONTROL TRANSPARENCY PROCEDURES OVERVIEW SHAREHOLDERS OF DIRECTORS TEAM MECHANISMS & BY-LAWS 100 Charalampos Mazarakis

OTE Group Chief Financial Officer

Back to the Management Mr. Mazarakis has over 20 years of professional experience, chiefly in senior management Team positions in Greece and abroad. Before joining OTE Group, in July 2012, as OTE Group Chief Financial Officer, he was Group Chief Financial Officer (CFO) of the National Bank of Greece, and from 2008 until 2010 Group Chief Financial Officer (CFO) and Member of the Group Executive Committee of TITAN Cement company. Mr. Mazarakis served in various executive positions in Vodafone Group: Group Finance Director and BoD Member in Greece (1999-2006), CEO in Hungary (2006-2007), Chief Operating Officer and BoD Vice-Chairman (2007-2008). He held the position of Finance Director and Member of the BoD at Georgia Pacific-Delica in Greece (1997-1999), while prior to that, he worked as Financial Analysis Manager at Procter & Gamble, first in Athens and then as Financial Analysis Group Manager at the European Centre in Brussels. Mr Mazarakis holds a Bachelor’s degree in Business Administration from the University of Piraeus (with distinction) and an MBA from the Fisher College of Business at The Ohio State University (Wielder Scholar), where he held the post of Teaching Assistant in Fi- nance. He has been ranked among the 30 most distinguished Finance Managers of Europe under the age of 40 (CFO Europe magazine, 2002).

BOARD MANAGEMENT CONTROL TRANSPARENCY PROCEDURES OVERVIEW SHAREHOLDERS OF DIRECTORS TEAM MECHANISMS & BY-LAWS 101 Eirini Nikolaidi

OTE Group General Counsel - Chief Legal & Regulatory Affairs Officer

Back to the Management Team

Ms.Eirini Nikolaidi is the General Counsel - OTE Group Chief Legal & Regulatory Affairs Officer and joined the Group in 1996 when she assumed the position of COSMOTE’s General Counsel. Ms Nikolaidi is a member of the Executive Committees of OTE and COSMOTE, member of the Boards of Directors of OTE’s subsidiaries in Romania and Albania as well as Member of the Supervisory Board of the Deutsche Telekom AG subsidiary in Croatia, Hrvatski Telekom d.d. She holds a law degree from the University of Athens, as well as a master’s degree (LLM) in International Business Law from the University of London (UCL), where she specialized, among others, in international finance and international trade law. She is a telecommunications expert and member of the Athens Bar Association.

BOARD MANAGEMENT CONTROL TRANSPARENCY PROCEDURES OVERVIEW SHAREHOLDERS OF DIRECTORS TEAM MECHANISMS & BY-LAWS 102 Elena Papadopoulou

OTE Group Chief Human Resources Officer

Back to the Management Team

Ms. Papapadopoulou has been OTE Group Chief Human Resources Officer since December 2011. She joined COSMOTE in September 2005, as COSMOTE Human Resources Director and in 2008, she assumed the position of COSMOTE Group Human Resources General Director. Prior to joining COSMOTE, Ms. Papadopoulou had worked in the Financial Division of Shell Hellas S.A., wherefrom she transitioned to Kraft Foods International as Human Resources Manager. Over the following ten years she was Human Resources Director and member of the Management team of Mercedes Benz Hellas, P.N. Gerolymatos and Praktiker Hellas of the Metro Group. Ms. Papadopoulou holds a Bachelor degree in Business Administration and Finance from Deree College.

BOARD MANAGEMENT CONTROL TRANSPARENCY PROCEDURES OVERVIEW SHAREHOLDERS OF DIRECTORS TEAM MECHANISMS & BY-LAWS 103 Stefanos Theocharopoulos

OTE Group Chief Technology & Operations Officer

Back to the Management Team

Mr. Stefanos Theocharopoulos joined OTE Group in 2002. Ιn April 2013, he assumed the newly-established position of OTE Group Chief Technology & Operations Officer. He was CEO of COSMOTE Romania since January 2008 and of Romtelecom since July 2011. He has also held the position of OTEGlobe Business Development Executive Director, OTE In- vestment Services Executive Technology Director, as well as BoD member in a number of OTE Group subsidiaries. Mr. Theocharopoulos holds a BEng in Electronic Engineering from Sussex University as well as an M.Sc. in Mobile & Satellite Communications from the University of Westminster.

BOARD MANAGEMENT CONTROL TRANSPARENCY PROCEDURES OVERVIEW SHAREHOLDERS OF DIRECTORS TEAM MECHANISMS & BY-LAWS 104 Grigoris Christopoulos

OTE Group Chief Commercial Officer Business Segment

Back to the Management Team

Grigoris Christopoulos brings with him more than 20 years of experience in telecommunications and Sales. He joined the OTE Group in 2000 as Sales Network Deputy Director at COSMOTE. In the following years, Grigoris held various management positions, including Executive Sales Director at COSMOTE, and Executive Sales Director Fixed & Mobile. In his most recent position as Business Sales & Marketing Executive Director Fixed & Mobile, he accounted for the B2B strategic planning and implementation, as well as the transformation and consolidation of Fixed, Mobile and ICT convergence. Mr. Christopoulos holds a B.Sc.in Electrical Engineering from the Technical University of Patras.

BOARD MANAGEMENT CONTROL TRANSPARENCY PROCEDURES OVERVIEW SHAREHOLDERS OF DIRECTORS TEAM MECHANISMS & BY-LAWS 105 Kostas Nebis

OTE Group Chief Commercial Officer Consumer Segment

Back to the Management Team

Mr. Kostas Nebis is a sales and marketing executive with more than 17 years of experience in the telecoms industry, appointed Chief Commercial Officer Consumer Segment of OTE Group since June of 2016. He has been a member of the executive staff of OTE-COSMOTE Group since 2009, as a Marketing Director (2009-2011) and CMO (2011-2012). Before joining OTE Group, he has worked for several years in Vodafone Greece as a Brand Manager (1999-2000), Product Manager(2000-2002), Group Brand Manager responsible for value added services(2002-2003) and postpaid propositions(2003-2005) and finally as a Senior Manager (2005-2009). He has also been a District Sales Manager at PepsiCo Greece (1995-1996). Mr Nebis has a BSc in Business Administration from the university of Piraeus & a BSc in Marketing and Management from the American College of Greece. Additionally he holds an MSc in International Economics, Banking and Finance from the Cardiff University of Wales (1999).

BOARD MANAGEMENT CONTROL TRANSPARENCY PROCEDURES OVERVIEW SHAREHOLDERS OF DIRECTORS TEAM MECHANISMS & BY-LAWS 106 Aristodimos Dimitriadis

OTE Group Executive Director Compliance, ERM & Insurance

Back to the Management Team

Mr. Aristodimos Dimitriadis assumed the position of Executive Director Compliance, ERM & Insurance OTE Group in November 2012. He has been a member of the executive team of COSMOTE since 2005 and was Head of Internal Audit and Compliance for the COSMOTE Group. Prior to his employment with COSMOTE Group, he worked at KPMG and for many years in the banking sector, first at ABN AMRO and later at FBB-First Business Bank as Internal Audit Officer. He holds a BA in Economics and Politics and an MBA from Kent University, UK. He is a Certified Internal Auditor (CIA), a Certified Financial Services Auditor (CFSA), Certified in Risk Management Assurance (CRMA) from the International Institute of Internal Auditors, Certified in Risk & Information Systems Control (CRISK),as well as a Certified Fraud Examiner (CFE) from Association of Certified Fraud Examiners. He also holds (ICA) International Advanced Certificate in Compliance & Financial Crime.

BOARD MANAGEMENT CONTROL TRANSPARENCY PROCEDURES OVERVIEW SHAREHOLDERS OF DIRECTORS TEAM MECHANISMS & BY-LAWS 107 Konstantinos Megas

OTE Group Executive Director Business Security & Continuity

Back to the Management Team

Mr. Konstantinos Megas is Executive Director Business Security and Continuity OTE Group. Mr. Megas joined OTE Group in 2012 and during his term until today has implemented among others the Situation Center and the Security Operation Center. The target is the mutation of the procedures and the security systems expertise focusing to the prevention and protection of the company and the clients of OTE Group from security incidents and the assurance of the Business Continuity of the Group as well. Before joining OTE Group, Mr. Megas worked for Ericsson as Engineer of Network Management System, Product Manager for Intracom, Sales Director for Cisco and Network IT Operations Director for Vodafone. Mr. Megas is a Graduate of the Royal Institute of Technology of Stockholm, Sweden with a Master of Science in Electronic Engineering and in Project Management Finance.

BOARD MANAGEMENT CONTROL TRANSPARENCY PROCEDURES OVERVIEW SHAREHOLDERS OF DIRECTORS TEAM MECHANISMS & BY-LAWS 108 Konstantinos Vasilopoulos

OTE Group Executive Director Internal Audit

Back to the Management Team

Mr. Konstantinos Vasilopoulos holds the position of Executive Director Internal Audit OTE Group since June 2016. He has served at OTE Group since 2004 and from 2007 until 2016 he held the position of Accounting Director. Before joining OTE Group, he worked as external auditor for the audit firm Arthur Andersen (1997-2002) and as Finance Manager at ELYSEE S.A. of Syngelidis Group (2002-2004). Mr. Vasilopoulos holds a degree in Finance and Banking Management from the University of Piraeus.

BOARD MANAGEMENT CONTROL TRANSPARENCY PROCEDURES OVERVIEW SHAREHOLDERS OF DIRECTORS TEAM MECHANISMS & BY-LAWS 109 Deppie Tzimea

Executive Director Corporate Communications OTE Group

Back to the Management Team

Ms Tzimea is the OTE Group Corporate Communications Executive Director since July 2015. She joined the Group in February 2001 as OTE Group Corporate Communications Director. Since then, she has been a member of the executive committee reporting directly to the Chairman and CEO of the Group. Prior to that she held various senior executive positions in Marketing and Corporate Communications in the telecommunications industry (1995-2001). She has thorough knowledge and experience in all areas of communications including advertising, having worked at Adel Saatchi & Saatchi, amongst others. Ms Tzimea holds a postgraduate degree in Communications and Public Relations from Stirling University and is a Political Sciences & Public Law graduate from the University of Athens Law School.

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Internal Audit

OTE Group Internal Audit is an independent function overseen by the Audit Committee. It promotes organizational improvement and supports the Group in achieving its objectives, through the implementation of a systematic and disciplined approach, demonstrating due professional care. Based on an annual risk assessment process performed in close cooperation with management and the other involved functions, the Annual Audit Plan is defined, taking into account the Group’s strategic Audit Committee objectives. Based on this Annual Audit Plan, which is approved by the Audit Committee, Internal Audit oversees Internal reviews the Internal Controls System in order to provide assurance for its effectiveness. Internal Audit is a valuable partner in supporting and further enhancing the Group’s control environment. Audit and monitors its activities through Internal Audit function operates in compliance with Law 3016/2002 and Decision 5/204/2000 of regular reporting the Hellenic Capital Markets Commission (legislation currently in force applying to listed companies); furthermore Internal Audit practices generally conform to the International Standards for the Professional Practice of Internal Auditing established by the Institute of Internal Auditors (IIA) as well as the Hellenic Corporate Governance Code For Listed Companies.

Execution of the Annual Audit Plan, resulting in A risk-based assessment audit recommendations results in the Annual and agreed management Audit Plan, which is action plans. Continuous aligned with the Group’s follow up on their strategy and objectives implementation / progress

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External Audit

The company’s financial statement audits are carried out by statutory auditors.

Every year, the Ordinary General Assembly of Shareholders approves the appointment OTE’s Ordinary General Assembly of an audit firm or a consortium of statutory of Shareholders in June 2016 auditors to audit the company’s financial assigned the statutory audit of statements, according to Law 4449/2017, 2016 financial statements to (stand-alone and consolidated) and business PRICEWATERHOUSECOOPERS SA. operations over the fiscal year following an opinion given by the Audit Committee regarding the independence of the Auditors, on the basis of the criteria set by the law.

The Audit Committee assures the Statutory Auditors’ independence and approves the relevant fees

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Compliance Management System

• The OTE Group has adopted a Compliance Management System (CMS) regarding the company’s compliance with the legislation in force, as well as internal policies and codes (on a company and Group level), aiming to prevent risks and other legal consequences for the company and its employees • The efficiency of the Compliance Management System is supervised by the OTE Group Compliance, Enterprise Risks & Corporate Governance Committee, the Audit Committee and the Board of Directors

Compliance Projects in 2016 Included:

Compliance Risk Assessment & Compliance Measure Plan Training of Company Personnel regarding Compliance Codes / Policies

• A Compliance Risk Assessment was carried out in OTE & COSMOTE by the Compliance Team. In • Participation of more than 700 Group Employees (in managerial and non-managerial positions) in this assessment, fifty (50) OTE & COSMOTE executives participated representing 83% of OTE & the Compliance training program (anti-corruption training seminars and relevant induction trainings COSMOTE activities for new hires) • The company formulated the Compliance Measure Plan for 2017, based on the results of the Compliance Risk Assessment held in 2016

OTE Group Compliance Reports

Integrity check & Compliance Business Assessment Procedure • Presentation of four (4) OTE Group Compliance Reports to the OTE Group Compliance, Enterprise Risks & Corporate Governance Committee for their review, evaluation and, subsequently, for their • More than 1,140 supplier/consultant/partner integrity checks were conducted, in order to avoid risks submission to the competent corporate bodies arising from partnerships with suppliers, consultants and other business partners • Twenty-eight (28) draft contracts with consultants (regardless of the contract amount) were reviewed from Compliance perspective

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Compliance Management Process Manual Internal Communication of Compliance-related issues to Personnel through relevant Campaigns / Announcements • Updating of the Compliance Management Process Manual, in which the binding specifications for the design of Compliance Management System (CMS) that are applicable to the entire OTE Group are • OTE Group Anti-Corruption Campaign, on the occasion of the International Anti-Corruption Day provided (december 9th) and the International Human Rights Day (December 10th). Title of the Campaign: “Transparency. Essential in order to move forward” • OTE Group Whistleblowing/Speak up Campaign, informing of the Compliance communication channels “Ask me” and “Tell me” (“Whistleblowing”), as a reminder of the existing mechanism for the management Amendment and/or Adoption of OTE Group Compliance Codes / Policies / Procedures of queries/tip offs and its importance. Title of the Campaign: “At OTE Group, we speak openly” • Guidelines on accepting and granting of benefits (gifts/invitations to relevant events) for celebrating • OTE Internal Regulation of Operations (Amendment) christmas and Easter • OTE Group Policy on Insider Trading (Amendment) • OTE Group Anti-Fraud Policy (Amendment) • OTE Group Donation Policy (Amendment) • OTE Group Sponsoring Policy (Amendment) Coordination of Human Rights issues • OTE Group Whistleblowing Policy (Amendment) • Company’s Internal Regulation of Operations Amendment Procedure (Adoption) • Definition of compliance communication channels for queries/tip offs regarding Human Rights issues. Compliance Trainings also include relevant mentioning to the importance of the issue

Statements signed by Senior Financial Officers (SFOs)

• Members of the BoD and SFOs stated in writing that they have been informed of the requirements of the Code of Ethics for SFOs and comply with its provisions that aim towards honest and ethical business conduct

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CEO’s message on Human Rights & Against Corruption (addressed to OTE Group employees, as part of the Anti-Corruption & Human Rights Day Internal Announcement Campaign on 9/12/2016) December 9th: International Anti-Corruption Day December 10th: International Human Rights Day

At the OTE Group, we endorse the values of transparency, meritocracy and trust, and systematically work to protect and communicate them. All our actions reflect our commitment to managing our relations with the Group’s customers, investors and suppliers with integrity and responsibility.

Guided by the OTE Group Code of Conduct, in the framework of the Compliance Management System, we apply our values to our activities aiming to the protection of human rights, the development and implementation of environmental friendly practices and, of course, to fighting corruption.

Adhering to the Principles of the UN Global Compact that have been adopted by the OTE Group Social Charter, we have shaped our culture, which defines the way we cooperate with each other and with our external business partners. In this way, we move forward, speak openly, and secure our company’s sustainability and growth.

Michael Tsamaz Chairman & CEO

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Certification of CMS System (1)

Certification of Compliance Certification of Management System (CMS) by external CMS system (2) Auditor, in accordance with the requirements of the IDW Assurance Certification of Compliance Management Standard 980 “Principles for the Proper System (CMS) as per ISO 37001:2016 Performance of Reasonable Assurance “Anti-bribery management systems – Engagements Relating to Compliance Requirements with guidance for use” Management Systems” Compliance Objectives

Compliance based Corporate Culture Survey

Survey aiming to get a better understanding of ethical and compliant behavior within the Group

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Compliance Policies and Codes OTE Internal Regulation of Operations

OTE Group Code of Conduct

OTE Group Code of Ethics for Senior Financial Officers (SFOs)

Binding Corporate Rules Privacy (BCRP)

OTE Group Whistleblowing Policy

OTE Group Anti-Fraud Policy

OTE Group Policy on Insider Trading

OTE Group Donation Policy

OTE Group Sponsoring Policy

OTE Group Policy on Accepting and Granting of Benefits

OTE Group Event Policy

Policy on Avoiding Sexual Harassment within OTE Group

OTE Group Policy on Anti-Trust Law

Policy on Employee Relations within OTE Group

OTE Group Policy on Avoiding Corruption and other Conflicts of Interest

OTE Group Corporate Responsibility Policy

OTE Group Social Charter

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Enterprise Risk Management (ERM) System

The OTE Group ERM System is based on the COSO ERM standard and the ELOT ISO 31000:2009 “Risk Management - Principles and Guidelines” standard, while its main objective is to safeguard the smooth operation and the future corporate success of OTE Group. The OTE Group ERM System is certified according to ISO 31000 Standard, both in Greece for OTE and COSMOTE, and in Romania for Telekom Romania & Telekom Romania Mobile.

Early Assessment Management Communication Control Identification Of risks

ERM is a systematic approach of identifying, analyzing and evaluating risks in order to develop preventive strategies and ensure the effectiveness of existing control measures.

ERM benefits: ERM Policies: • Consistent risk assessment criteria • Enterprise Risk and Insurance Management Policy • Accurate and concise risk information for decision making and planning • Policy on Pensions and Risk Benefits • Cost effective and efficient risk mitigation measures • Risk Assessment Procedure • Ensure risk exposure remains within acceptable level (thresholds) • Manage all Risk Insurance Policy Indemnities • Protect staff, assets, property and reputation • Meet compliance and government requirements • Achieve corporate objectives • Improve Shareholders’ confidence and trust • Encourage proactive management • Improve corporate governance

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Enterprise Risk Management (ERM) Framework OTE Group ERM Framework

ERM encompasses a continuous analysis process for the following: • Early identification • Assessment • Management OTE Group Risk • Communication and Landscape • Mitigation of enterprise risks

It aims to manage risks to an acceptable level which has been determined by the Board of Directors and the senior management Risk Assessment

Risk Identification

Risk assessment consists of four processes: Communication Monitoring and Consultation: Risk Analysis and Review: OTE Group Risk • Risk identification: identifies and describes the risks that could OTE Group Risk Corporate Risk Report affect the achievement of objectives Report Register

• Risk analysis: assesses the nature, sources, and causes of the risks that have been identified and estimates the level of risk. Risk Evaluation It also evaluates the impacts, consequences and the relevant controls that currently exist

• Risk evaluation: compares risk analysis results with risk criteria in order to determine whether or not a specified level of risk is acceptable

• Risk treatment: involves measures and decisions to handle risks Risk Treatment and to minimize their impact (avoid, reduce, transfer, accept)

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Ote Group Risk Portfolio: ERM Impact Matrix – Heat Map

The combination of the potential risk impact and the likelihood of risk occurring within the Risk Matrix - Heat Map Group represents a location of a potential risk in a matrix called Risk Matrix. All risks shown in the risk portfolio are considered for decisions to define and implement appropriate Very critical treatment. The risk severity depends on the evaluated > €20mn likelihood and impact. Based on the risk severity appropriate risk response should be decided. Immediate action required Critical > €12mn < €20mn

High priority action required to manage risk Impact (mn) Middle > €5mn < €12mn

Risk Monitoring: Check risk causes, develop Small contingency plans > €1mn < €5mn

Very low Low Medium High 0-5% 5-25% 25-50% 50-100%

Likelyhood

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ERM related Activities in 2016 Attestation of the Enterprise Risk Management (ERM) System as per ELOT ISO 31000:2009 “Risk Management – Principles & Guidelines” both in Greece and in Romania Creation and implementation of a common methodology of risk evaluation and assessment for all business units and the Group subsidiaries, based on Group criteria of assessment and evaluation, in order to have a common way of enterprise risk management at OTE Group, in accordance with the requirements of the standard ISO 31000:2009 and the common methodology of OTE Group Enterprise Risk Management Creation of an ERM Manual, in which the requirements, the principles, the responsibilities and the methodology for the enterprise risk management at OTE Group companies in Greece and abroad are described, in accordance with the OTE Group risk management methodology and the international standard ISO 31000:2009 Incorporation of the results of individual business units’ and subsidiary companies’ risk assessments in OTE Group Corporate Risk Register, for the purpose of systematic analysis and structured monitoring of corporate risks Presentation of four (4) OTE Group Risk Reports to the OTE Group Compliance, Enterprise Risks and Corporate Governance Committee for its review, regarding the completeness, accuracy and precision of the “OTE Group Top Risks Heat Map” content, and then its submission to the competent corporate bodies, namely the OTE Audit Committee and the OTE Board of Directors ERM Objectives for 2017 Attestation of Telekom Albania’s Enterprise Risk Management (ERM) System as per ISO 31000:2009 “Risk Management – Principles & Guidelines”

Enhancement of risk culture within the organization, with the definition and implementation of risk appetite throughout the Group and with a time horizon of two years.

Bodies and Official Functions that are involved in OTE Group’s Enterprise Risk Management The Board of Directors

The Audit Committee

The OTE Group Compliance, Enterprise Risks and Corporate Governance Committee

Business Managers

The business units of Executive Director Compliance, Enterprise Risk Management & Insurance OTE Group

External Auditors

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Internal procedures based on applicable legislation Other transparency practices

Placing special emphasis on transparency and disclosure, OTE implements various related procedures, which stem from the legislative framework in force: Other practices that enhance the disclosure of information to all interested parties include: Timely and fair disclosure to the public and posting of company-related information on the OTE’s Regulated information disclosure process pursuant to the provisions of corporate website (https://www.cosmote.gr/, https://www.cosmote.gr/fixed/corporate/ir) Law 3556/2007 The presentation of activities and communication with Shareholders through the release of corporate publications (Annual Financial Report, Annual Report, Sustainability Report), press releases, financial Timely and fair distribution of periodic and continuous information to the investment community. results announcements. Public disclosure of changes (acquisition or disposal) of important participations. The establishment of a two-way communication channel between company representatives and the investment community (via conferences, corporate presentations, investor days, road shows (in Greece and abroad) & conference calls. Responding to Shareholder requests (both individual and institutional investors, in Greece and abroad) Processes pursuant to Regulation (EU) No. 596/2014 of the European and providing information related to the exercise of their rights and the payment of dividends. Parliament and of the Council on Market Abuse and Law 3016/2002 on Organizing and hosting the company’s General Assemblies of Shareholders and ensuring the optimum Corporate Governance disclosure of information to Shareholders . Co-operation with the Stock Exchanges and Capital Market Commissions in the countries where OTE is listed. Prevention of insider trading and market manipulation. Notification and public disclosure of transactions on securities of the company by persons with managerial positions in the company and persons closely associated with them. Monitoring of any financial activities/transactions of those persons who hold managerial positions at the company with basic customers and suppliers.

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Company By-laws

The company’s by-laws include:

Articles of Incorporation Audit Committee Regulations

The AoI among others, define: It defines the responsibilities and regulates the operation of the Audit Committee a) The scope and activities of the company, b) the appointment and term of office of the BoD members, the BoD composition and its operation, as well as its powers and the procedure to delegate further its powers Compensation And Human Resources Committee Code Of Operations c) The operation of the General Assembly of Shareholders and the topics for which BoD / General Assembly of Shareholders is exclusively competent. Defines the responsibilities and the operation of the Compensation and Human Resources Committee

Internal Regulation of Operations OTE Group Compliance, Enterprise Risks And Corporate Governance Committee Regulation Of Operations Covers issues relating to: • Company’s organizational structure and responsibilities of its business units Defines the responsibilities and the operation of the OTE Group Compliance, Enterprise Risks and Corporate • Responsibilities of executive and non-executive members of the BoD Governance Committee • Recruitment and evaluation of executives • Procedures for the monitoring of transactions of persons discharging managerial responsibilities persons on company’s securities and public disclosure thereof Internal Audit Charter • Procedure for the monitoring of transactions of liable persons with important customers and suppliers • Applicable rules and the monitoring of transactions between affiliated companies Approved by the Board of Directors , following Audit Committee‘s consent, it regulates the operation of the • Company’s Internal Audit, Investor Relations and Corporate Announcements business units. company’s Internal Audit

Regulation Of Operations Of The Board Of Directors Procurement Policy

Regulates the way in which the BoD is called, convenes as a corporate body, operates and reaches decisions. Defines the terms and the rules according to which the procurement processes of OTE and COSMOTE are It also refers to the responsibilities of the Chairman and the Vice-Chairman of the Board carried out

BOARD MANAGEMENT CONTROL TRANSPARENCY PROCEDURES OVERVIEW SHAREHOLDERS OF DIRECTORS TEAM MECHANISMS & BY-LAWS 7 Sustainability Our world, a better world Sustainability Our world, a better world

OTE Group takes part in Sustainable Development indices aiming to continuously improve its performance 5 redefined sustainability priorities in line with business priorities, stakeholder dialogue, OTE Group’s Sustainable analysis and evaluations Development Strategy is an integral component of its business strategy 7. Sustainable Development strategy 125

OTE Group aims to enhance its sustainable business, while contributing to the support of society and the protection of the environment. The Group’s Sustainable Development is an integral part of its business strategy and operation. In 2016, ΟΤΕ Group redefined its sustainability priorities in line with business priorities and based on the results of:

• Continuous dialogue with stakeholders, Digital A better World • Analysis of international trends and Society For all developments in corporate responsibility issues, • Internal evaluation and improvement processes of the Group’s approach

Responsible business

Sustainable Responsible Environment Work and For all development

BUSINESS SUSTAINABLE DEVELOPMENT MATERIALITY PARTICIPATION IN SUSTAINABLE SOCIAL AND STRATEGY PILLARS MODEL GOVERNANCE ANALYSIS DEVELOPMENT INDICES ENVIRONMENTAL INDICES 7. Sustainable Development Pillars 126

Responsible Business Responsible Work Place and Environment

Our aim is to stand as an example, by operating responsibly throughout the value chain. We constantly We aim for a continuous distinction as an attractive employer who provides a safe, sustainable and creative develop procedures, policies, tools, systems and mechanisms which allow the Group’s companies, to working environment for its employees. At the same time, we encourage development, recognizing good manage business and operational matters responsibly. We are moving towards our digital transformation so performance, acknowledging equal opportunities and highlighting talents within the internal and external we can provide a complete digital experience to our customers, employees, partners and suppliers. public.

Digital Society Sustainable Environment for All

Our ultimate goal and commitment is an exceptional customer experience. With respect to the customer We aim for a financial growth in accordance with environmental responsibility in all aspects of our and the free competition legislation, we contribute into the building of a digital society. We connect people performance. For this reason our environmental strategy focuses on minimizing the environmental impact within a world of unlimited digital possibilities, with the aim to make their lives better. We develop innovative of our activities, on the development and provision of products and services, which allow the enhancement products and services, which contribute to the sustainable development, with environmental and social of productivity and protection of the environment in other sectors and to inform and raise awareness for benefits for all. our stakeholders.

Better World for All

With technology and innovation, we create a better world for all. The plethora of social contribution and corporate volunteering initiatives that take place throughout the country, aim at supporting vulnerable social groups, children, education, local communities, entrepreneurship, culture and sports.

The OTE Group business model aims to create value for its Shareholders but also for customers, OTE Group of Companies society, and employees. Governance

OTE Group is by far the biggest investor in telecommunications in Greece. Its investments Financial Capital We help create a better world for all through technology. Financial Capital Dividend paid, taxes paid, Use of financial resources for Vision We are the number one loved brand in the country in optical fibers and next generation EBITDA telecommunication networks exceed the amount achieving the best financial performance of 2 billion euros in the past six years, and it has Human Capital already announced investments worth Euro 1.5 Human Capital Technology and IT Best Customer Innovation & Revenue Lead in High employees’ skills, billion for the 4 years to follow that will benefit Information dissemination Leadership Experience Transformation Core Business engagement and satisfaction its customers and the country. With our customer training and development levels centered philosophy and the exploitation of of employees, benefits to technology and innovation, the OTE Group employees Operational & Cost Optimization Produced Capital Products and services of provides complete communication services and Produced Capital Strategy Pillars high quality fixed and mobile entertainment, it actively contributes to the Investment in networks and People Strategy telephony, broadband and economy and society, invests in its employees physical assets to improve paid television services and creates a better world for all. and upgrade services offered Intellectual Capital The Group’s efficient operation and high Intellectual Capital 1. Customer delight drives our action Development and Marketing competitiveness lead to positive economic Investment in research and 2. Respect and integrity guide our behavior of innovative products and results, a fact that allows it to reinvest in the development of innovative 3. Team together - Team apart services products and services business so as to create more value for all its 4. An excellent place to perform and grow 5. I am “OTE Group” - You can count on me Natural Capital stakeholders in the short, medium and long term. Guiding Principles Natural Capital Reduction of CO2 emissions, Use of natural resources, increased energy efficiency, including energy, for efficient waste management operation Digital Society A Better World Sustainable Working Sustainable Environment Environment Social Capital Social Capital Support of vulnerable social

In dialogue with the Pillars groups, improved social stakeholders, support of Responsible Business contribution and customer society experience Corporate Responsibilty Responsibilty Corporate

Inputs Value Creation Outputs

The governance structure, through which sustainability issues are embedded in the key business EXECUTIVE DIRECTOR CORPORATE COMMUNICATIONS OTE GROUP processes, is reflected in the OTE Group Corporate Responsibility Policy. Executive Director The OTE BoD is responsible for the corporate responsibility performance of the Group and represents • Recommends Group-wide corporate responsibility policies, assigns work and strategic actions etc. its interests in corporate responsibility and sustainable development issues related to the Group. The • Cooperates with the Chairman and CEO on corporate responsibility issues and informs the BoD supervision is entrusted to the President and Chief Executive Officer of OTE Group. seeking guidance or approval, if applicable • Formulates Group-wide corporate responsibility strategy, policies guidelines and corporate The subsidiaries are responsible for implementing the standards, requirements and corporate responsibility programmes responsibility objectives of the Group and can also implement programs on the basis of local needs. • Acts as the central interface between the corporate responsibility bodies and as the official representative of the OTE Group in all aspects of corporate responsibility

OTE Board of Directors Corporate Responsibility Department Fixed and Mobile • Develops corporate responsibility strategy, corporate responsibility policy and corporate Board of Directors responsibility program (in the form of strategic policies) Approves Group-wide corporate responsibility policies, position papers and significant strategic projects, as • Prepares the decisions to be made by the OTE Group Corporate Communication Division or Boards needed of Directors • Coordinates and monitors implementation of corporate responsibility policies, develops indicators Chairman and CEO and monitors progress towards target achievement Overseas OTE Group corporate responsibility strategy and performance • Runs the OTE Group corporate responsibility Managers Network and supports the Deutsche Telekom Group Corporate Responsibility Managers Network

OTE Subsidiaries’ Boards of Directors OTE Group Corporate Responsibility Managers’ Network* • Following OTE Board of Directors approval, approve the adoption of Group-wide corporate responsibility policies, positions, strategic projects • Disseminates Group-wide expertise • Facilitates communication between international subsidiaries / business areas • Are responsible for measures to implement corporate responsibility policies / corporate responsibility strategy

* OTE Group Corporate Responsibility Managers’ Network participates in Deutsche Telekom Group Corporate Responsibility Managers Network

The OTE Group companies identify the most important issues of their sustainable development through the “Materiality Analysis’ carried out in accordance with the Group’s Corporate Risk Management approach. In 2015, with the OTE Group’s participation (meetings with 12 Executive Directors) and its stakeholders (3,387 responses via an online questionnaire from all stakeholder groups) determined the materiality of sustainability issues for two years. The results were approved by the OTE Group Management. All available data were evaluated so as to be of use in the Group’s operations planning and strategy. The key issues were included in its risk map (see. Section “Risks and Uncertainties for the next year”).

1. Digital Inclusion 15. Materials used in products 2. Safe use of products and services 16. Governance and management 3. Data security and privacy 17. Responsible competitiveness 4. Marketing communications 18. Economic Performance 5. Enabling role of ICT products and services 19. Business resilience 6. Product and service quality and labeling 20. Compliance, anti-corruption and bribery 7. Privacy and freedom of expression 21. Impact to Society and the Environment 8. Employment 22. Research and Technology 9. Employee health, safety and wellness 23. Economic Impacts 10. Training and education 24. Energy consumption and climate 11. Responsible labor practices change mitigation 12. Respect for human rights 25. Electromagnetic radiation 13. Stakeholder engagement 26. Water and land use management 14. Supply Chain (suppliers) 27. Environmental burden 28. Waste Management

Since 2008, OTE meets all the requirements and is a member of the FTSE4Good Index Series. Since December 2016, ΟΤΕ has been participating in the new index FTSE4Good Emerging Index.

Since January 2014, Forum Ethibel has included OTE in its Ethibel EXCELLENCE Investment Register. This selection by Forum Ethibel, Since 2010 , OTE has been participating , in the CDP for climate indicates that the company performs better than average in change, by communicating all the necessary information through its sector in terms of corporate social responsibility, making their platform. During the 2016 evaluation, ΟΤΕ receive d a rating the company eligible for social and sustainable investments. In of Β (Management) (on a Α, Α-, Β, Β-, C, C-, D και D- rating scale), the assessment completed in 2016, OTE obtained a rating of C rating it above its industry group average. (available rating scale: A,B,C,D, E and M).

ΟΤΕ has been included in the Euronext Vigeo Emerging 70 sustainability index, since June 2015. Amongst leading companies in the Eurozone and Developing Markets, OTE is the only Greek company that is part of these indices.

OTE Group’s Social And Environmental Indices for 2016

Telekom Romania Telekom Romania ΟΤΕ COSMOTE Telekom Albania Communications Mobile Communications

Employees covered 8,405 1,957 4,761 825 438 by permanent agreements

Women employees 29 51 36 54 63

Employees covered by collective 99 92 100 100 0 bargaining agreements

Work-related fatal accidents 0 0 0 0 0 (number of employees)

Work-related non-fatal accidents 52 9 6 3 0 (number of employees)

Training hours 17.03 12.84 21.46 17.4 4 11.94 (hours/ employee)

Telekom Romania Telekom Romania Telekom ΟΤΕ COSMOTE Communications Mobile Communications Albania

Sponsorships - donations (incl. in Kind) (€) 1,878,272 1,740,417 206,893 226,491 121,637

Social programs (number of programs) 30 16 14 2

Voluntary participation of employees in corporate 10,716 238 44 48 responsibility initiatives (number of participants)

People supported (number of people estimated) 1,007,243 195,819 155,719 7,350

Electricity Consumption (GWh) 260.86 177.4 8 123.80 81.47 18.20

Fuel consumption and district heating (GWh) 9.78 13.03 27.99 1,72 6.34

Fuel consumption in vehicle fleet (GWh) 31.62 7.43 32.00 7.14 1.19

Direct (scope 1) emissions CO2 (t) 10,067.86 5,301.58 11,485.27 2,144.13 1,991.83

Indirect (scope 2) emissions CO2 (t) 174,8 47.73 118,914.17 42,149.54 26,069.57 127.39

For more information on OTE Group’s Corporate Responsibility practices you may visit: https://www.cosmote.gr/otegroupsustainability2016

Information on Annual Financial Report is available here Project Managers Evrikos Sarsentis – Head of OTE Group Mergers Acquisitions & Investor Relations Division Yiannis Mamakos – Investor Relations, Deputy Director

Editorial Preparation and Content Supervision Sofia Ziavra Christina Hadjigeorgiou Konstantinos Krokos

Publication Communication Strategy & Design Deppie Tzimea – Executive Director Corporate Communications OTE Group

Publication Design, Development and Communication Polly Katsouli Anna Kyriazi Nantia Tsokou

Creative Concept - Design Production MySpectrum

Published June 2017